Now with that information can you please help me with the following two questions and provide me with how you came to find this answer
The Lees believe that production and sales could double after being on
Shark Tank which is scheduled in December of 20XY. They want to be prepared for this. Based
on the budgeted income statement calculated above for 20XY, with the above information can you help me with a new budgeted income for 20XZ assuming that the production and sales is double the level of 20XY.
If production does increase dramatically after their presentation on Shark
Tank, the Lees will need more space for production. They have two options. Option 1 is to rent
out a spacious warehouse nearby. If they pursue this option, there rent will be $1200 per month
and utilities are estimated to cost an additional $350 per month. Their second option, Option 2,
is to rent a smaller storefront space that is also nearby. The storefront rent is $1350 per month.
However, utilities will likely only cost an additional $150 per month. They want to compare their
options over one year’s time (since each rental contract is a 1 year commitment). What is the
incremental analysis if the Lees choose Option 1 over Option 2