Expand Your Critical Thinking 22-02 (Part Level Submission) The condensed income statement for the Pharoah and Paul partnership for 2020 is as follows. Pharoah and Paul Company Income Statement For the Year Ended December 31, 2020 Sales (250,000 units) Cost of goods sold Gross profit Operating expenses Selling Administrative 1,250,000 800,000 450,000 $250,000 206,250 456,250 $(6,250) Net loss A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable Your answer is correct. Compute the break-even point in total sales dollars and in units for 2020. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g 2,520.) Break-even point in dollars 1266890 Break-even point in units 253378 units Click if you would like to Show Work for this question: Open Show Work Your answer is correct. Pharoah has proposed a plan to get the partnership "out of the red" and improve its profitability. She feels that the quality of the product could be substantially improved by spending $0.25 more per unit on better raw materials. The selling price per unit could be increased to only $5.25 because of competitive pressures. Pharoah estimates that sales volume will increase by 25%, what effe would Pharoah's plan have on the profits and the break-even point in dollars of the partnership? (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to 0 decimal places, e.g. 2,520.) Effect Amount Profit 109375Increase Break-even points 1330234Increase Click if you would like to Show Work for this question: Open Show Work Your answer is partially correct. Try again. Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Pharoahs: (1) increase variable selling expenses to $0.59 per unit, (2) lower the selling price per unit by $0.25, and (3) increase fixed selling expenses by $50,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made, what effect would Paul's plan have on the profits and the break-even point in dollars of the partnership? (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to O decimal places, e.g. 2,520.) Effect 393907 TIncrease 7250Increase Amount Profit Break-even point Click if you would like to Show Work for this question: Open Show Work