Gamer Company manufactures game consoles. The company's contribution-format income statement for the most recent year is given below: Total Per Unit Sales (150,000 units) $13,500,000 $90 4,050,000 27 Less variable expenses 9,450,000 $63 Contribution margin Sala Less fixed expenses 7,560,000 Operating income $ 1,890,000 Management believes operating income can be further improved and would like you to prepare the following analysis. Required: (round all calculations to 4 decimal places) a) Compute the company's break-even point in sales dollars. (3 marks) b) Assume that sales increase by $270,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's operating income increase? (2 marks) Viour patterns remain unchanged, by how much will the company's operating income increase? (2 marks) c) Refer to the original data. Assume that next year, management wants the company to earn a minimum profit of $2,000,000. How many units will have to be sold to meet this target profit figure? (3 marks) d) Refer to the original data. In an effort to increase sales and profits, management is considering increasing its adverting spending by $350,000. It is expected that the increase advertising will increase unit sales by 20,000 units. What is the overall expected change in operating income if these changes are implemented? (3 marks) - 16C ot 21/ hp increase advertising will increase unit sales by 20,000 units. What is the overall expected change in operating income if these changes are implemented? (3 marks) e) Refer to the original data. In an effort to increase sales and profits, management is considering the use of a higher-quality material. The higher-quality material would allow the company to increase sales price by $10 per unit, it will also increase variable costs by $3 per unit, but management could eliminate one quality inspector who is paid a salary of $400,000 per year. Unit sales volume would remain unchanged. Assuming that changes are made as described above, prepare a projected calculation of operating income for next year. (4 marks) -16C 10:31 AM 21/1 O hp