Last year contribution-format income statement of High-technology project is as follows assuming that the number of units sold was 25,000:

1Calculate the total sales in units and dollars at the break-even point.

2Calculate the total variable expenses and total contribution margin at the break-even point.

3Calculate the margin of safety in units, dollars and as a percentage.

4Calculate the contribution margin ratio and variable cost ratio.

5Assume that next year the project manager is targeting to earn a profit at least $ 80,000. How many units will have to be sold to meet this target profit?

6Refer to the original data. If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the project's expected change in the net operating income?

7Refer to the original data. The project manager expects sales to increase by 15% next year if costs are better controlled by decreasing variable cost per unit by 10% and terminating the contract of one employee receiving a total salary of $30,000 per year. By how much should net operating income increase/decrease?

8Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with a $70,000 increase in advertising expenditures, would cause annual sales in units to increase by 50%. Prepare two contribution format income statements, one showing the results of last year's operations and one showing what the results of operations would be if these changes were made. Would you recommend that the project manager do as the sales manager suggests?

Contribution format income statements
	Before change	After change
Sales
Variable cost
Contribution margin
Fixed costs
Net operating income