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Income statement, rate increases

Could someone help me with this. I have half done but got confussed. Please see the attached document. Thanks!
The questions are as follows:

1) Prepare a projected income statement for Metropolitan News for the 20X3-X4 fiscal year using a format that shows the total variable costs and total fixed costs for the newspaper (round calculations the nearest thousand dollars).
2) The management of Metropolitan News is contemplating one additional proposal for the 20X3-X4 fiscal year-raising the for the newspaper to the following amounts:

Single issue price: $0.20 daily; $0.40 Sunday
Weekly subscription: $1.25 (includes daily and Sunday)

The company estimates that the newspaper's circulation would decline to 90 percent of the currently anticipated 20X3-X4 level for both newsstand and home delivery sales if this change is initiated. Calculate the effect on the projected 20X3-X4 income if this proposed rate increase is implemented.


Solution Preview

<br><br>I have structured my answer in two parts.
<br><br>The first part in this email, in which I will give you general instruction on how to handle this type of problems and on how to handle this problem specifically.
<br><br>The second part is the excell spreadsheet to which I will refer during the first part. The excel spreadsheet is not your final answer, it should be used as a descriptive tool to get to your answers. All the formulas and results are shown but the format of the answer and the figures are not the ones that you've been asked for (I use a different version of Excel).
<br><br>In the spreadsheet you have three tabs. 2003 which is what you had in the word document. 2004 (1) which contains the details of the answers to question 1 and 2004 (2) which is a copy of 2004 (1) with the changed parameters (see below) to answer question 2.
<br><br>Part 1
<br><br>a) General instructions for this type of problems
<br><br>In this type of problem, you are requiered to build a model (question 1) to which you can change some input parameters (question 2). Therefore what you need to do while answering the first question is to single out the parameters that will be used in ...