Heli Manufacturing produces headphones and has been suffering from heightened competition. The following tables highlights the results of Helis operations for 2019:

Sales (12500 units @ $84)	$ 1 050 000
Variable (12 500 @ $63)	787 500
Contribution Margin	$ 262 500
Fixed Costs	296 100
Operating Profit (loss)	($ 33 600)

Required:

1. (2 marks) Compute Helis breakeven point in both units and dollars.
2. (1 mark) Compute the contribution margin ratio.
3. (2 marks) What will be the required sales, in both units and dollars, to generate a pre-tax profit of $30 000.
4. (5 marks) Prepare a contribution margin income statement for sales of 16,481 units.
5. (10 marks) Refer to the original data. The Vice President, Marketing feels that a 10% reduction in price, in combination with a $40 000 increase in advertising will cause sales to increase by 25%. What effect would this strategy have on operating profit (loss)?