B Company, a manufacturer of helmets, has the following information for its most recent year of operations 2021 and is planning for 2022 operations. Selling price $50 per unit, current sales volume 7,800 units, Variable manufacturing costs of $25 per unit and Fixed costs of $200,000 per year.

Consider the following independent situations.

10. B wants to know the number of units to sell in order to break-even.

11. B wants to know the break-even sales in total dollars.

12. To attain a target profit of $40,000, how many units have to be sold?

13. Management thinks that by increasing fixed costs in advertising per year by $20,000, it will have a corresponding 10% increase in sales. By how much will net operating income increase or decrease from its current performance?

14. Management is considering increasing the price by 10% and expects volume to be the same due to price sensitivity of customers. It also aims to decrease variable manufacturing costs by $3 by using cheaper materials. By how much will net operating income increase or decrease from its current performance?

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