Sun Inc. sells a single product. The company's 2012 income statement is given below. Sales (4,000 units) $800,000 Less flexible (variable) expenses $200,000 Less capacity-related (fixed) expenses $300,000 In an attempt to improve performance, Jo, the manager is considering a number of alternative actions. Each situation is to be evaluated separately. 1. Calculate operating income and the break-even point in units and dollars for 2012 2. Jo believes that a $100,000 increase in equipment improvements will increase sales considerably. How much must sales increase to justify this capital expenditure? 3. Jo believes that flexible costs can be decreased by 10%. As a result, she wants to reduce the selling price by 2% in anticipation of a 5% increase in sales. What are projected profits if these proposals are implemented?