1. Bob has a store that sells thingamajigs. During his first year (2005) his gross sales were $495,000. He had his accountant sort through their expenses and categorized them according to variable and fixed. The following table summarizes that analysis. Help Bob understand his options by answering the questions below.

	2023
Revenue	$495,000
Cost of Goods Sold	$371,250
Operating Revenue	$123,750
Expenses
Variable (other than COGS)	$42,750
Fixed Costs (Expenses)	$85,000
Total Costs	$127,750
Profit (loss)	-$4,000

1. What is Bobs breakeven point assuming fixed costs remain the same and the costs of goods sold and other variable expenses remain in the same proportion to sales as they are now?
2. If Bobs business has been growing by $20,000 per month (so that he projects year-end sales in 2024 of $735,000), when will Bob pass the breakeven point (how months rounded to the nearest month)?
3. Assume Bob has $40,000 in cash to use to improve his business. Calculate the following:
   1. Bob applies this to his variable costs (perhaps by improving energy efficiency) so that his Other Variable Costs would go down by $10,000 per year. What would his new break-even point become (all other things staying constant)? What profits would he earn (based on his growth projections) in 2024?
   2. Bob applies this to his fixed costs so that they come down by $10,000 per year. What would be his new break even (all other things staying constant)? What profits would he earn (based on his growth projections) in 2024?
   3. What would you do if you were Bob? Why?