Backwoods Hikers takes tourists on adventurous hikes through wilderness areas. Each hiker pays $200 for the adventure. Variable costs average $120 per person, and total fixed costs are $720,000 per year.

1. How much revenue (in dollars) must be generated if the company wishes to earn $150,000 income after taxes if the tax rate is 25%? Show your calculations. (If necessary, round to the nearest whole dollar

2. Assume that at a particular level of operating revenues, the companys operating income is $125,000.

a. What is the total contribution margin (in dollars) at this level of operations? Show your computations. (Hint: Put together a partial income statement to back into the answer, referring to the original data for the amount of fixed costs.)

b. What would operating income be if sales increased by 10%? Show your computations, rounding your answer to the nearest whole dollar, if necessary.