Moira Mondragon tells fortunes for rich clients who need her assistance in making important decisions. She has gathered the following information regarding her costs:reMoira Mondragon tells fortunes for rich clients who need her assistance in making important decisions. She has gathered the following information regarding her costs:

depreciation= $7000 per month

commissions= $50 per unit

research= $30 per unit + $5000 per month

The depreciation relates to the facility where Moria meets her clients. It has been carefully decorated and meticulously arranged to provide just the right atmosphere. Commissions are the fees paid to her network of contacts who provide referrals to her --- including doctors, phychologists, social workers and police. The research is the fact finding that must be carefully done before each appoinment.phychologists, social workers and police. The research is the fact finding that must be carefully done before each appoinment.

Currently, Moira charges each client $750. On average. she does 20 readings per month. She has decided that she needs to increase her net income so that she clears $5,000 per month. She has identified two potential ideas:

a. Increase commisions by $50. She belives this will increase unit sold by 50%commisions by $50. She belives this will increase unit sold by 50%

b. Increase the selling price to $1,000. She belives this will be acceptable to her clients, but only if she increases her research efforts. She believes this will cost her $3,000 per monthbelives this will be acceptable to her clients, but only if she increases her research efforts. She believes this will cost her $3,000 per month

1 For each idea, as well as for the original situation, write conrtibution-format income statement. Compute the break-even point in units, as well as the number of unit that must be sold in order to achieve the target NIconrtibution-format income statement. Compute the break-even point in units, as well as the number of unit that must be sold in order to achieve the target NI

2 To think about: what actions, if any, would you recommend to Moira.