1. Information concerning Alpha Company's product is as follows:

Sales: $300,000

Variable costs: $240,000

Fixed costs: $40,000

If Alpha increased sales by 20% (with no changes in selling price), what should be the new operating income?

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2) The following data apply to Beta Corporation for a given period:

Variable costs per unit : $3.50

Contribution margin per unit: $1.50

Breakeven sales (present volume) : $1,000,000

Beta wants to sell an additional 50,000 units at the same selling price.Variable costs per unit are not likely to change, but Beta may incur additional fixed costs.By how much can fixed costs increase before the additional 50,000 units of additional sales are not worthwhile?