Crane Recreation Products sells the Amazing Foam Frisbee for $17. The variable cost per unit is $8; fixed costs are $41,000 per month. 1. What operating income must Crane earn to realize net income of $17,100, assuming that the company is in the 35% tax bracket?

2. Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows:

Sales revenue $51,000

Cost of goods sold (all variable)

26,000 Gross margin 25,000

Selling expenses (20% variable) 5,400

Administrative expenses (60% variable) 11,000

Operating income $8,600

2.- If Mary can increase sales by 15%, by how much will her operating income increase?