Kaiser Industries carries no inventories. Its product is manufactured only when a customers order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2014, Kaisers break-even point was $1.38 million. On sales of $1.20 million, its income statement showed a gross profit of $176,000, direct materials cost of $403,700, and direct labor costs of $509,700. The contribution margin was $176,000, and variable manufacturing overhead was $48,600. (a) Calculate the following: (Round intermediate calculations to 2 decimal places e.g. 2.25% and final answers to 0 decimal places, e.g. 1,225.)

1. Variable Selling and Administrative Expenses = $________ 2.Fixed Manufacturing Overhead = $62000 (correct) 3. Fixed selling and administrative expenses = $________

(b) Ignoring your answer to part (a), assume that fixed manufacturing overhead was $101,600 and the fixed selling and administrative expenses were $79,800. The marketing vice president feels that if the company increased its advertising, sales could be increased by 21%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure?

Maximum increased advertising expenditure = $__________