The Jonco Company is considering adding a new product to

The Jonco Company is considering adding a new product to their line of kitchen gadgets. Jon has budgeted $70,000 for a marketing campaign. Jon anticipates a distribution cost of $5.00 on each unit. Jonco can obtain quantity discounts on the cost of the Dice-O-Matic as follows:

If he adds the product to his line, Jon projects an increase in his payroll expense of $42,000 and an increase in overhead of $18,000. Jonco’s previous experience with similar products and promotion programs is reflected by the following price/ demand data.

Jon has asked you to prepare a pro-forma contribution income statement showing his marginal operating income (EBIT) if he adds the dice-o-matic. Use the format of the following pro-forma statement: