Part 2. GGay and Joy are concerned that the estimated fixed costs are too low. They believe that theyll need additional equipment, increasing their fixed costs by $ 31,500. Also, there has been a change in the corporate tax rate. Find the new 2018 corporate tax rate and properly cite your source (Links to an external site.). Adjust your analysis to assume an increase of $31,500 in fixed costs and the new corporate income tax rate.

1. Prepare a schedule summarizing the effects of the change.
2. Discuss the impacts on break even units of adding additional fixed costs.
3. What would the impact on break even units be if the company increased advertising by $40,000? (Your answer needs to include more than "increase" or "decrease" - by how many units would breakeven increase or decrease?

Part 1

Sales (100,000 units)			$ 1,000,000
Costs:	Fixed	Variable
Raw Materials	$ 0	$ 300,000
Direct Labor	0	200
Factory Costs	100	150
Selling and Administrative Costs	110	50
Total Costs	210,000	$ 700,000
Operating Income			$ 90,000
1.
Variable Cost	700000
Sales	1000000
Sales Unit	100000
Contribution Margin (unit)	3
Breakeven Sales unit	70000