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XMAS Company manufactures decorations, The company's contribution-format income statement for the most recent year is given belown Operating income $880,000 Management believes operating income can

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XMAS Company manufactures decorations, The company's contribution-format income statement for the most recent year is given belown Operating income $880,000 Management believes operating income can be further improved and would like you to prepare the following analysis. Required: (round all calculations to 4 decimal places) a) Compute the company's break-even point in sales dollars. ( 3 marks) b) Assume that sales increase by $340,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's operating income increase? (2 narks) c) Refer to the original data. Assume that next year, management wants the company to earn a minimum profit of $950,000. How many units will have to be sold to meet this target profit figure? ( 3 marks) d) Refer to the original data. In an effort to increase sales and profits, management is considering increasing its adverting spending by $80,000. It is expected that the increase advertising will increase unit sales by 5,000 units. What is the overall expected change in operating income if these changes are implemented? ( 3 marks)

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