Answer
Net Income for 2015 = $875,000 - $693,500 = $181,500
Work Step by Step
Net Income for 2015 with Additional Advertising Cost:
Additional Advertising Cost = $16,500$
Expected Sales = 25,000 units \times $35 = $875,000
Total Variable Cost = Variable Cost per Unit \times Expected Sales
Total Variable Cost = $18.50 \times 25,000 = $462,500
Total Costs = Total Variable Cost + Total Fixed Costs + Additional Advertising Cost
Total Costs = $462,500 + $214,500 + $16,500 = $693,500
Net Income for 2015 = Expected Sales - Total Costs
