Part 1: The following is Earnest Corporation's contribution format income statement for last month: Sales .............................................. $1,200,000 Variable expenses.......................... 900,000 Contribution margin ...................... 300,000 Fixed expenses.............................. 210,000 Net operating income .................... $ 90,000 The company has no beginning or ending inventories and produced and sold 20,000 units during the month. Required (show calculations): a. What is the company's contribution margin ratio? b. What is the company's break-even in units? c. If sales increase by 125 units, by how much should net operating income increase? d. What would total sales in dollars need to be to attain target profits of $120,000?

Part 2: Review the articles on pricing your products or services. Using the business you used in the budgeting assignment, in your own words describe 3 potential pricing strategies that the business could use. Detail which you think would be best with 2 alternatives that could also be possible. Your response should be approximately 250 words.