Required information

[The following information applies to the questions displayed below.]

This firm has two officesone in Paris and one in Italy. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the companys most recent year is given:

							Office
	Total Company						Paris						Italy
Sales	$	1,125,000		100.0	%		$	225,000		100	%		$	900,000		100	%
Variable expenses		607,500		54.0	%			67,500		30	%			540,000		60	%
Contribution margin		517,500		46.0	%			157,500		70	%			360,000		40	%
Traceable fixed expenses		252,000		22.4	%			117,000		52	%			135,000		15	%
Office segment margin		265,500		23.6	%		$	40,500		18	%		$	225,000		25	%
Common fixed expenses not traceable to offices		180,000		16.0	%
Net operating income	$	85,500		7.6	%

Required:

1-a. Compute the companywide break-even point in dollar sales.

1-b. Compute the break-even point for the Paris office and for the Italy office.

2. By how much would the companys net operating income increase if Italy increased its sales by $112,500 per year? Assume no additional fixed costs.