Thomas Corporation developed the following income statement using a contribution margin approach:

Thomas Corporation
Projected Income Statement
For the Current Year
Sales			$750,000
Less variable costs:
Variable manufacturing costs	$280,000
Variable selling costs	120,000
Total variable costs			400,000
Contribution margin			$350,000
Less fixed costs:
Fixed manufacturing costs	$130,000
Fixed selling and administrative costs	80,000
Total fixed costs			210,000
Operating income			$140,000

The projected income statement was based on sales of 100,000 units. Thomas has the capacity to produce 120,000 units during the year.

Required:

A. Determine the break-even point in units. fill in the blank 1 units

B. The sales manager believes that the company could increase sales by 8,000 units if the advertising expenditures were increased by $22,000. By how much will income increase or decrease if this plan is put into effect? $fill in the blank 2

increasedecrease

C. What is the maximum amount the company could pay for advertising if the sales would really increase by 8,000 units? $fill in the blank 4