Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow.

Units Produced	Total Lumber Cost	Total Utilities Cost	Total Machine Depreciation Cost
9,000 shelves	$108,000	$12,350	$135,000
18,000 shelves	216,000	22,700	135,000
36,000 shelves	432,000	43,400	135,000
45,000 shelves	540,000	53,750	135,000

Cost Fixed Portion of Cost Variable Portion of Cost (Per unit)

Lumber	0	12
Utilities	2000	1.15
Depreciation	135,000	0

	Units Produced		Total Cost
January	4,360	units	$65,600
February	275		6,250
March	1,000		15,000
April	6,775		103,750
May	1,750		32,500
June	3,015		48,000

Total Fixed Cost = 2,125

Variable Cost per unit = 15

Number of Units Produced	Total Cost
3,500	54,625
4,360	67,525
6,775	103,750

Cover-to-Cover Company

Biblio Files Company

Contribution margin ratio (percent)

20

40

Unit contribution margin

1.00

2.00

Break-even sales (units)

20,200

50,500

Break-even sales (dollars)

101,000

252,500

Income Statement - Cover-to-Cover

Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$404,000
Variable costs:
Manufacturing expense	$242,400
Selling expense	20,200
Administrative expense	60,600	(323,200)
Contribution margin		$80,800
Fixed costs:
Manufacturing expense	$5,000
Selling expense	4,000
Administrative expense	11,200	(20,200)
Operating income		$60,600

Income Statement - Biblio Files

Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$404,000
Variable costs:
Manufacturing expense	$161,600
Selling expense	16,160
Administrative expense	64,640	(242,400)
Contribution margin		$161,600
Fixed costs:
Manufacturing expense	$83,000
Selling expense	8,000
Administrative expense	10,000	(101,000)
Operating income		$60,600

Sales Mix

Type of Bookshelf	Sales Price per Unit	Variable Cost per Unit
Basic	$5.00	$1.75
Deluxe	9.00	8.10

Type of Bookshelf	Percent of Sales Mix	Break-Even Sales in Units	Break-Even Sales in Dollars
Basic	60%	85.200	$426,000
Deluxe	40%	56,800	$511,200

Target Profit

Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales.

1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? _____________

2. If Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? _____________