Data: Assume that you are part of the accounting team for Sutcliffe Industries. The company has only one product that sells for $40 per unit. Sutcliffe estimates total fixed costs to be $9,500. Sutcliffe estimates direct materials cost of $4.80 per unit, direct labor costs of $6.00 per unit, and variable overhead costs of $1.20 per unit. The CEO would like to see what the gross margin and operating income will be if 500 units are sold in the next period.

Units Sold at Break Even 500

Orginal Operation Cost $4500

Question: What would operating income be if the units sold exceeded the break-even point by five (5) units?