You are a division manager at Caddo Co. Below is your divisions income statement and other relevant information for the current year: GAAP Income Statement Other Relevant Information Revenue $ 250,000 Fixed Mfg OH costs $22,000 Cost of Goods Sold 125,000 Variable Mfg OH $0 Gross Margin 125,000 Fixed Admin costs $45,000 Administrative Costs 45,000 Variable selling costs 3% of revenues Selling Costs 55,000 Profit $ 25,000 A. (18 points) Prepare an income statement in the space below for your division using the contribution margin format.

B.

For purposes of the next two questions, assume that all costs shown on the income statement (that

you just prepared in part A) can be directly traced to your division (i.e., there are no corporate-level

allocations).

i. Compute the breakeven point in total $ of revenues.

ii. If revenues increased by $10,000 from your answer in part A, how much would your profits increase?

Assume that the increase in revenue are purely a result of increased sales volume.