=+1,600 units @ $485 per unit $ 776,000 $ 776,000 2,500 units @ $975* per unit $2,437,500 2,437,500 Fixed 488,000 636,000 1,124,000 __________ __________ __________ Total expenses $1,264,000 $3,073,500 $4,337,500 __________ __________ __________ Income from operations $ 56,000 $ 26,500 $ 82,500 __________ __________ __________ __________ __________ __________

*$825 of the $975 per unit represents materials costs, and the remaining $150 per unit represents other variable conversion expenses incurred within the Navigational Systems Division.