11)

International Data Systems information on revenue and costs is only relevant up to a sales volume of 117,000 units. After 117,000 units, the market becomes saturated and the price per unit falls from $20.00 to $11.80. Also, there are cost overruns at a production volume of over 117,000 units, and variable cost per unit goes up from $10.00 to $10.50. Fixed costs remain the same at $67,000.

a.	Compute operating income at 117,000 units.

Operating income

$

b.	Compute operating income at 217,000 units.

Operating income

$