Crane Footwear Co. produces high-quality shoes. To prepare for next year's marketing campaign, the company's controller has prepared the following information for the current year, 2022:

Variable costs (per pair of shoes)
	Direct materials		$41
	Direct manufacturing labour		22
	Variable overhead (manufacturing, marketing, distribution, customer service, and administration)		20
	Total variable costs		$83
Fixed costs
	Manufacturing		$2,785,000
	Marketing, distribution, and customer service		545,000
	Administrative		725,000
	Total fixed costs		$4,055,000

Selling price per pair of shoes		$183
Expected revenues, 2022 (50,700 units)		$9,278,100
Income tax rate		40%

(a)

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Your answer is correct.

Calculate the projected operating income before tax for 2022.

Operating income before tax

1015000

(b)

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Your answer is correct.

Calculate the break-even point in units for 2022.

Break-even point

40550

units

(c)

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Your answer is incorrect.

The company controller has set the revenue target for 2023 at $10,193,100 (or 55,700 pairs). He believes an additional marketing cost of $449,000 for advertising in 2023, with all other costs remaining constant, will be necessary to attain the revenue target. Calculate the operating income for 2023 if the additional $449,000 is spent and the revenue target is met.

Operating income

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