The Following are financial information of a jewelry shop: Exhibit A J Jewelers; Income Statements for Years Ended January 31 (thousands of dollars)
	2003	2004	2006
Sales	$8,583	$8,102	$10,711
Cost of goods sold	4,326	4,132	5,570
Gross margin	$4,257	$3,970	$5,141
Expenses
Selling expense
Salaries	2,021	2,081	3,215
Commissions	429	405	536
Advertising	254	250	257
Administrative expenses	418	425	435
Rent	420	420	840
Depreciation	84	84	142
Miscellaneous expenses	53	93	122
Total expenses	$3,679	$3,758	$5,547
Net income	$ 578	$ 212	$ (406)

Exhibit B J Jewelers Operating Statistics
	2003	2004	2006
Sales space (square feet)	10,230	10,230	15,280
Sales per square foot	$839	$792	$701
Sales tickets	5,341	5,316	6,897
Average sales ticket	$1,607	$1,524	$1,553

1. How much would the average sales ticket have to increase to breakeven if the fixed cost remained the same in 2007 as it was in 2006?

2. One idea that a consultant had was to reduce prices to bring in more customers. If average prices were reduced 10% and the number of sales tickets increased to 7,500, would the company's income be increased? With price reduced, what is the new breakeven point in sales tickets and dollars?