Connelly Inc, a manufacturer of quality ice cream makers, has experienced a steady growth in sales over the past few years. Because her business has grown< Jan De Janey the president believes that she needs an aggressive advertising campaign next year to maintain the company's growth. To prepare for the growth, the accountant prepared the data for the current year.

Variable cost per ice cream maker

Direct labor $9.00

Direct materials $10.50

Variable overhead $4.50

Total variable costs $24.50

Fixed costs

Manufacturing $102.000

Selling $59,000

Administrative $448,000

Total fixed costs $609,000

Selling price per unit $45

Expected sells(*units) $44,500

1 If the costs and sells price remain the same, what is the projected operating profit for the coming year?

2 What is the break even point in units for the coming year?

3 Jan has set the sales target for $54,000 for ice cream makers, which she thinks she can achieve by an additional fixed selling expense of $185,745 for advertising. All other cost remain the same as per data in the table above. What will be the operating profit if the additional $185,745 is spent on advertising and sales rises to 51,400 units

4 What will be the new break even point if the additional 185,745 is spent on advertising

4a Prepare a contribution income statement at the new break even point

5 What is the percentage change in both fixed costs and the break even point

5a If the additional $185,745 is spent on advertising in the next year, what is the sales level ( in units) needed to equal the current years operating profit at $44,500 units