Izzy Ice Cream has the following price and cost information:

Price per 2-scoop sundae $5.00

Variable cost per sundae:

Ingredients 1.35

Direct labor 0.45

Overhead 0.20

Fixed cost per month $7,500

Required:

1. Determine Izzy's break-even point in units and sales dollars.

2. Determine how many sundaes must be sold to generate a profit of $15,000.

3. Calculate Izzy's new break-even point for each of the following independent scenarios:

a. Sales price decreases by $0.50.

b. Fixed costs decrease by $300 per month.

c. Variable costs increase by $0.50 per sundae.

4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $40,000, if sales price increases by $0.50 and variable costs increase by $0.30?