- Increase the sales of women's clothing in the US by 35%.
- Add men's clothing for the first time in its product line; total of 12,000 men's suits will be sold in 2016 at an average price of $275 per unit. These coats will be purchased from a South African company at a price of $185 per unit and sold to only Online customers. Fatima Company also will offer incentives to customers; customers can buy the suit and a nice silk tie for a price of only $300. The ties cost the company $8/unit and it is expected that 20% of the men's market will buy the "package" deal.
- The cost of goods sold for the existing (US) product line consists of 80% variable and 20% fixed. (Remember, the fixed amount calculated for 2015 will remain unchanged for 2016 and only the variable expenses will change with the sales; SAME APPLIES FOR THE OPERATING EXPENSES).
- The operating expenses for the existing line of business are 45% fixed and 55% variable.
- The variable operating expenses for the online market will be 20% (as a percent of online sales of men's suits): In addition, there will be fixed operating expenses for the online business in the amount of $65,000/ per year.
Calculate the net projected income for 2016, assuming the tax rate stays the same. (Note that the company and not the product lines pay the tax).
