Water corpoartions income statement:

Sales	12,000,000
Variable Exp	-7,800,000
Contribution Margin	4,200,000
Fixed exp	-2,800,000
Operating Income	1,400,000
Income Tax expense	-350,000
Net Income	$1,050,000

A) What is the break even level of sales?

B) Assume that the number of units sold is 100,000. What level of sales in units would be needed if the company wants to achieve a net income of $1,500,000?

C) Assume again that the number of units sold is 100,00. managements believes that a price reduciton of $5 per unit combined with an increase in advertising expenses of $300,000 will cause sales to increase by 20%. What is the net benefit or cost of this proposal? Do not prepare an income statement to arrive at the answer.