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Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February $25,000 10,000

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Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February $25,000 10,000 15,000 1,500 3,500 1,250 750 750 400 $ 6,850 March $37,500 15,000 22,500 1,500 5,000 1,875 750 875 400 $12,100 c. Blake plans to sell 500 stuffed mascots next month. How much operating income can Blake expect to earn next month if he realizes his planned sales? d. Blake wasn't happy with the projected income statement you showed him for a sales level of 500 stuffed mascots. He wants to know how many stuffed mascots he will need to sell to earn $3,700 in operating income. As a safety net, he also wants to know how many stuffed mascots he will need to sell to break even. e. Blake is evaluating two options to increase the number of mascots sold next month. First, he believes he can increase sales by advertising in the university newspaper. Blake can purchase a package of 12 ads over the next month for a total of $1,200. He believes the ads will increase the number of stuffed mascots sold from 500 to 960. A second option would be to reduce the selling price. Blake believes a 10% decrease in the price will result in 1,000 mascots sold. Which plan should Blake implement? At what level of sales would he be indifferent between the two plans? f. Just after Blake completed an income projection for 1,200 stuffed mascots, his supplier called to inform him of a 20% increase in cost of goods sold, effective immediately. Blake knows that he cannot pass the entire increase on to his customers, but thinks he can pass on balf of the 20% increase while suffering only a 5% decrease in units sold. Should Blake respond to the increase in cost of goods sold with an increase in price

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