Go Spirit imprints calendars with college names. The company has fixed costs of \(\$ 1,104,000\) each month plus variable costs of \(\$ 3.60\) per carton of calendars. Go Spirit sells each carton of calendars for \(\$ 10.50\).

Requirements 

1. Use the income statement equation approach to compute the number of cartons of calendars Go Spirit must sell each month to break even.

2. Use the contribution margin ratio CVP formula to compute the dollar amount of monthly sales Go Spirit needs to earn \(\$ 285,000\) in operating income. Round the contribution margin ratio to 2 decimal places.

3. Prepare Go Spirit's contribution margin income statement for June 2009 for sales of 450,000 cartons of calendars. Cost of goods sold is \(70 \%\) of variable costs. Operating costs make up the rest of the variable costs and all of the fixed costs. 

4. The company is considering an expansion that will increase fixed costs by \(40 \%\) and variable costs by one-fourth. Compute the new breakeven point in units and in dollars. How would this expansion affect Go Spirit's risk? Should Go Spirit expand?