Question: Based on the Pro Forma statement, do you suggest adding a new product line? Discuss the pros and cons. Morgan Corporation Pro Forma Income Statement

Based on the Pro Forma statement, do you suggest adding a new product line? Discuss the pros and cons.

Morgan Corporation

Pro Forma Income Statement

For 2012

2011

2012

Sales

3300000

3800000

Cost of Goods Sold

2250000

2550000

Gross Profits

1050000

1250000

Selling and Administrative Expense

600000

690000

Depreciation Expense

100000

100000

Operating Profit

350000

460000

Interest Expense

52000

50000

Earnings before taxes

298000

410000

Taxes

58000

123000

Net Income

240000

287000

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