Sales (4000 cakes) $ 175,000 Variable costs to produce 125,000 Contribution Margin 50,000 Rent and Utilities for the shop 25,000 Operating Income 25,000 Income Tax Expense (10%) Net Income 2500 22,500 Required Cathy wants to know the following about her business: A) What is her break-even point in cakes (units) sold? B) What is the Cake Shop's Margin of Safey in dollars? C) Cathywants to run a special promotion to sell a new specialty red velvet cake she plans to sell. She wants to discount all cakes sold by 8%. Variable costs would increase by $3.5 per unit, but sales would increase by 18%. The advertising for this would cost $8000. Should Cathy run this promotion? Use incremental analysis to determine the incremental income/loss.