The relationship between income/cost/volume suggests that there are four ways by which profit can be increased. These are: 1 Increase unit selling price. 2 Decrease unit variable cost. 3 Decrease fixed costs. 4 Increase volume. Assume that the current situation for a product is as follows: Sales volume 1,000 units Selling price £2 each Variable cost £1 per unit Fixed costs £500 You are required to:

(a) draw four separate breakeven charts showing the effect of the following changes on the current situation: (i) a 10% increase in volume, (ii) a 10% increase in unit selling price, (iii) a 10% decrease in unit variable cost, (iv) a 10% reduction in fixed costs.

(b) Use your charts to state the additional profit resulting from each change. (AQA (Northern Examinations and Assessment Board): GCE A-level)