1. Miller, Inc. sold 10,000 units for $70/unit of its only product last year. Operating information from last year is shown below:

Total Cost

Total Manufacturing Costs $440,000

Selling & Administrative Expenses

Variable: $ 60,000

Fixed: $ 32,000

Millers management has indicated that manufacturing costs are 50% variable and 50% fixed. Management does not expect a change in the price/cost structure for next year.

1. What percentage of each sale goes toward profit after the breakeven point is reached?
2. If sales increase by $70,000, how much will net income increase?
3. How many units must be sold to breakeven?
4. If the company sells 8,000 units, what is expected profit?
5. The marketing manager believes that an increase in advertising of $30,000 would increase expected sales by 1,000 units. How would this affect (1) the breakeven point and (2) profit?