The income statement for Callister Company for 2017 appears below. CALLISTER COMPANY Income Statement For the Year Ended December 31, 2017

Sales (40,000 units) ................................................................................... $1,000,000

Variable expenses ..................................................................................... 700,000

Contribution margin .................................................................................... 300,000

Fixed expenses .......................................................................................... 360,000

Net income (loss) ....................................................................................... $ (60,000)

Show computations using the contribution margin technique to support your answers:

1. What was the company's break-even point in sales dollars in 2017?

2. How many additional units would the company have had to sell in 2018 in order to earn net income of $45,000?

3. If the company is able to reduce variable costs by $2.50 per unit in 2018 and other costs and unit revenues remain unchanged, how many units will the company have to sell in order to earn a net income of $45,000