Sun Inc sells a single product. The company's 2012 income statement is given below. 1) Calculate operating income and break-even point in UNITS and DOLLARS for 2012. 2) Jo believes a $100K increase in equipment improvements will increase sales considerably. How much must sales increase to justify this capital expenditure? 3) What are the projected profits if the propsals (in Q3 below) are implemented?

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. Required: a. Calculate operating income and the break-even point in units and dollars for 2012 b. Jo believes that a $100,000 increase in equipment improvements will increase sales considerably. How much must sales increase to justify this capital expenditure? c. 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