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"I'll never understand this accounting stuff," Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. "Last month, we sold 2,000 stuffed State University mascots and earned \$6,565 in operating income. This month, when we sold 3,000 I thought we'd make $9,848. But this income statement shows an operating income of $11,615 ! How can I ever make plans if I can't predict my income? I'm going to give Janice one last chance to explain this to me," he declared as he picked up the phone to call Janice Miller, his accountant. "Will you try to explain this operating income thing to me one more time?" Blake asked Janice. "After I saw last month's income statement, I thought each mascot we sold generated $3.28 in net income; now this month, each one generates $3.87 ! There was no change in the cost we paid for each mascot, so I don't understand how this happened. If I had known I was going to have \$11,615 in operating income, I would have looked more seriously at adding to our product line." Taking a deep breath, Janice replied, "Sure, Blake. I'd be happy to explain how you made so much more operating income than you were expecting." Blake is evaluating two options to increase the number of mascots sold next month. First, he believes he can increase sales by advertising in the university newspaper. Blake can purchase a package of 12 ads over the next month for a total of $1,500. He believes the ads will increase the number of stuffed mascots sold from 1,500 to 2,200. A second option would be to reduce the selling price. Blake believes a 15% decrease in the price will result in 2,400 mascots sold. Calculate the operating income for each options? (Round per unit to 2 decimal places and final answers to 0 decimal places, e.g. 5,275.) Which plan should Blake implement? At what level of sales would he be indifferent between the two plans? (Round per unit to 2 decimal places and round up the final answer to the nearest whole unit, e.g. 5,275.) mascots decimal places, e.g. 52.75.) Fixed expenses Advertising Total fixed expenses Operating income 750 1500 500 eTextbook and Media Your answer is correct. Blake plans to sell 1,500 stuffed mascots next month. How much operating income can Blake expect to earn next month if he realizes his planned sales? (Round per unit to 2 decimal places and final answer to 0 decimal places, e.g. 5,275.) Total Per unit Sales Variable expenses Cost of goods sold Shipping Advertising Wages Total variable expenses Contribution margin Fixed expenses Insurance $ 37500 585 $ 12.5 .55 \begin{tabular}{r} 4.4 \\ \hline \end{tabular} Blake wasn't happy with the projected income statement you showed him for a sales level of 1,500 stuffed mascots. He wants to know how many stuffed mascots he will need to sell to earn $5,555 in operating income. (Round per unit to 2 decimal places and final answer to 0 decimal places, e.g. 5,275.) mascots As a safety net, he also wants to know how many stuffed mascots he will need to sell to break even. (Round per unit to 2 decimal places and final answer to 0 decimal places, e.g. 5,275.) mascots eTextbook and Media