A.Interchange Inc. has a unit selling price of $220. The variable cost per unit was $180, and fixed costs were $80,000. The maximum sales within Interchange Inc.s relevant range are 2,750 units. Interchange Inc. is considering a proposal to spend an additional $30,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.

B.Construct a cost-volume-profit chart indicating the break-even sales. Verify your answer, using the break-even equation.

C.Using the cost-volume-profit chart prepared in part (a), determine: the income from operations if 2,000 units were sold

D the maximum income from operations that could have been realized during the year. Verify your answers using the mathematical approach to cost-volume-profit analysis.

Construct a cost-volume-profit chart indicating the break-even sales for the current year, assuming that a noncancellable contract is signed for the additional billboard advertising. No changes are expected in the unit selling price or other costs. Verify your answer, using the break-even equation.

Using the cost-volume-profit chart prepared in part (c), determine:

the income from operations if sales total 2,750 units and

the maximum income from operations that could be realized during the year if the additional advertising increases the relevant range to 3,000. Verify your answers using the mathematical approach to cost-volume-profit analysis.