Monterey Co. makes and sells a single product. The current selling price is $18 per unit. Variable expenses are $10.8 per unit, and fixed expenses total $39,080 per month. (Unless otherwise stated, consider each requirement separately.)

Calculate the break-even point expressed in terms of total sales dollars and sales volume. (Do not round intermediate calculations.)

Break-even sales
Break-even volume		units

b. Calculate the margin of safety and the margin of safety ratio. Assume current sales are $115,700. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places.)

c. Calculate the monthly operating income (or loss) at a sales volume of 5,150 units per month. (Do not round intermediate calculations.)

d. Calculate monthly operating income (or loss) if a $2 per unit reduction in selling price results in a volume increase to 8,350 units per month. (Do not round intermediate calculations.)

f. Calculate the monthly operating income (or loss) that would result from a $1 per unit price increase and a $6,000 per month increase in advertising expenses, both relative to the original data. Assume a sales volume of 5,150 units per month. (Do not round intermediate calculations.)

Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paid a salary of $2,500 per month.

g-1. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.9 per unit, assuming a sales volume of 5,150 units per month. (Do not round intermediate calculations.)

g-2. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.9 per unit, assuming a sales volume of 6,250 units per month. (Do not round intermediate calculations. Losses should be indicated by a minus sign.)

h-1. Assuming that the sales volume of 6,250 units per month achieved in part g could also be achieved by increasing advertising by $1,000 per month instead of changing the sales force compensation plan. What would be the operating income or loss?(Do not round intermediate calculations. Losses should be indicated by a minus sign.)