Tyler Inc. produces and sells a single product. The selling price of the product is $30.00 per unit and its variable cost is $21.00 per unit. The fixed expense is $90,000 per month. Sales volume for July totaled 12,000 units.

1) Calculate the Operating Income for July

2) Calculate the break -even units sold and break-even point in total revenues

3) Management is considering the use of automated production equipment. If this were done, variable costs would drop to $15.00 per unit, but fixed expenses would increase to $100,00/monthly.

a) calulate operating income at a volume of 12,000 with this new structure

b) calulcate the break-even point in units with this new structure