P22-4A Studio Signatures imprints T-shirts with company logos. Studio has fixed expenses of $585.000 per year plus variable expenses of $4.20 per T-shirt. Each T-shirt sells for $12.00. Required 1. Use the income statement equation approach to compute the number of T-shirts Studio must sell each year to break even. 2. Use the contribution margin ratio CVP formula to compute the dollar sales Studio needs to earn $32,500 in operating income. 3. Prepare Studio's contribution margin income statement for 20X4 for sales of 70.000 T-shirts. Cost of goods sold is 80% of variable expenses. Operating expenses make up the rest of variable expenses and all of fixed expenses. 4. The company is considering an expansion that will increase fixed expenses by 20% and variable expenses by 30 cents per T-shirt. Compute the new breakeven point in units and in dollars. Use either the income statement equation approach or the contribution mar- gin approach. 5. Should Studio undertake the expansion? Give your reason.