' 1. 3,000 units PR 2043 Break-even sales and east-volumeprofit chart 0b]. 3. 4 Last year, Parr Co. had sales of $900,000, based on a unit selling price of $200. The variable cost per unit was $125, and fixed costs were #225,000. The maximum sales within Parr C035 relevant range are 7,500 units. Parr Co. is considering a proposal to spend an additional $112,500 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity. Instructions 1. Construct a cost-volumeprot chart indicating the break-even sales for last year. Verify your answer, using the breakeven equation. 2. Using the costvolumeprot chart prepared in part (I), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year. Verify your answers using the mathematical approach to cest-volume-profit analysis. 5. Construct a cost-volume-prot chart indicating the break-even sales for the current year, assuming that a noncancellahle contract is signed for the additional billboard advertising. No changes are expected in the selling price or other costs. Vern-y your answer, using the break-even equation. 4. Using the cost-volume-prot chart prepared in part (5), determine (a) the operating income if sales total 6,001) units and (b) the maximum operating income that could be realized during the year. Verify your answers using the mathematical approach to cost-volume-prot analysis