Q4. Alpha Company produces and sells a single product. The company's income statement for the month of July 2021 is given below:

Sales (5,000 units) $300,000

Less:

Variable Expenses $200,000

Contribution margin $100,000

Less:

Fixed Expenses $80,000

Net Operating Income $20,000

Note: There are no beginning or ending inventories.

a. Compute the company's monthly break-even point both in units and dollars.

b. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?

c. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by $10, but it will increase the fixed cost by $10,000. Compute the new break-even point in units.