Dragon sports inc. manufactures and sells two products, baseball bats and baseball gloves. the fixed costs are $870,000, and the sales mix is 20% bats and 80% gloves. the unit selling price and the unit variable cost for each product are as follows:

Pear co.’s income statement for the year ended december 31, as prepared by pear’s controller, reported income before taxes of $125,000. the auditor questioned the following amounts that had been included in income before taxes: equity in earnings of cinn co. $ 40,000 dividends received from cinn 8,000 adjustments to profits of prior years for arithmetical errors in depreciation (35,000) pear owns 40% of cinn’s common stock, and no acquisition differentials are relevant. pear’s december 31 income statement should report income before taxes of