In 2012, Mary's Jelly Company has sales of 8,000 units at $20 each, variable cost totaling $40,000,

Question:

In 2012, Mary's Jelly Company has sales of 8,000 units at $20 each, variable cost totaling $40,000, and fixed costs of $60,000. In 2013, the company expects annual insurance cost to increase by $5,000.

Required:
a. Calculate operating income and the breakeven point in units for 2012.
b. Calculate the breakeven point in units for 2013.