Problem 1 Paradox, Inc. produces and markets a machinery component called a "gromet". October monthly costs to produce 20,000 gromets are as follows: 'Paradox sells gromets for $4.00 per unit. Required a. Assuming unit sales =20,000 units, prepare a contribution income statement for the month of October (ignore income taxes). b. Determine Paradox's monthly: i. break-even point in sales units and in sales dollars. ii. Operating leverage ratio c. Assume Paradox reduces their selling price by $0.50/ unit and the number of units sold increase by 1,000 : i. Prepare a revised Contribution Income Statement ii. Determine the company's new break-even point in unit sales and sales dollars. iii. Determine the company's new operating leverage ratio. d. Using the original facts, before part c., compute Paradox's \% change in profits, if unit sales increase by 10%