total fixed expenses are increased by 10%. Find the sales in units to achieve a profit of $20,000, assuming no change in selling price. 2-B2 Basic CVP Analysis Peter Landis opened his own small day care facility, Toys N Tots (TNT), just over 2 years ago. After a rocky start, TNT has been thriving. Peter is now preparing a budget for November 19X6. Monthly fixed costs for TNT are Rent $ 800 Salaries 1,400 Other fixed costs 100 Total fixed costs $2,300 Required The salary is for Lynn McGraw, the only employee, who works with Peter in caring for the children. Peter does not pay himself a salary, but he receives the excess of revenues over costs each month. The cost driver for variable costs is "child-days." One child-day is one day in day care for one child, and the variable cost is $10 per child-day. The facility is open 6:00 A.M. to 6:00 P.M. weekdays (ie., Monday through Friday), and there are 22 weekdays in November 19X6. An average day has 8 children attending TNT. State law prohibits TNT from having more than 14 children, a limit it has never reached. Peter charges $30 per day per child, regardless of how long the child is at TNT. 1. Suppose attendance for November 19X6 is equal to the average, resulting in 22 8 = 176 child-days. What amount will Peter have left after paying all his expenses? 2. Suppose both costs and attendance are difficult to predict. Compute the amount Peter will have left after paying all his expenses for each of the following situations. Consider each case independently. a. Average attendance is 9 children per day instead of 8, generating 198 child-days. b. Variable costs increase to $11 per child day. c. Rent is increased by $200 per month. d. Peter spends $300 on advertising (a fixed cost) in November, which increases average daily attendance to 9.5 children. e. Peter begins charging $33 per day on November 1, and average daily attendance slips to 7 children