Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:

Sales	$	400,000
Variable expenses		160,000
Contribution margin		240,000
Fixed expenses		180,000
Net operating income	$	60,000

Required: ( 2.5 points total)

Answer each question independently based on the original data:

1. What is the variable cost per unit?
2. What is the break even point in units and sales dollars?
3. How many units must be sold to achieve a target profit of $85,000
4. If advertising increased by $35,000 , variable expense per unit increased by $2 and sales increased by $30,000:

• Will net income increase/decrease
• What will be the new net income amount?