XYZ Company Projected Income Statement For the Current Year Ending December 31
Sales (13,000 units)				$325,000
Less variable costs:
	Variable manufacturing costs		$78,000
	Variable selling costs		45,500
		Total variable costs		123.500
Contribution margin				$201,500
Less fixed costs:
	Fixed manufacturing costs		$91,000
	Fixed selling and administrative costs		40,000
		Total fixed costs		131,000
Operating income				$ 70,500

Required:

A.	Determine the break-even point in sales dollars.
B.	The sales manager believed the company could increase sales by 1,200 units if advertising expenditures were increased by $10,000. By how much will operating income increase or decrease if the advertising is increased as suggested?
C.	What is the maximum amount the company could pay for advertising if the advertising would increase sales by 1,200 units (income would not change)?