Suppose you intend to open a franchise business by the name GOKEY to supply a nationally-known line of womens shoes. Youve found a good location in Kabul to open your shop, where retail price per pair of shoe is $40 and variable costs are 30% of sales; fixed costs are $126,000 per month. Required 1. Compute the break-even point in units and in dollars using the information given above using contribution method 2. GOKEY Company currently sells 100,000 pair of shoes per year. If sales volume were to increase by 15%, by how much would new operating income? 3. In order to improve companies position in next year management have decided to make following changes: Variable costs increase to 45% of the current sales price and fixed costs increase by $10,000 per month. If GOKEY Company were to raise its sales price by 20% to cover these new costs, what would be the new annual breakeven point? 4. Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $10,000 per month. If GOKEY Company were to raise its sales price 10% to cover these new costs, but the number of pair of shoes sold were to drop to 95,000, what would be the new annual operating income?