Your small manufacturing operation has the following information concerning the main product:

Current Situation: Sales in Units 4,000 Sales in Dollars 720,000 less: Variable Costs 400,000 Contribution Margin 320,000 less: Fixed Costs 300,000 Operating Income 20,000

Your manager has asked you to prepare operating income estimates for these three following options.

Option 1 = This scenario assumes a 5% increase in sales volume (units) over the Current Situation as a result of 20,000 of increased advertising. As well, a $10 decrease in per unit variable cost can be realized as a result of new, automated production equipment. The new equipment will increase depreciation expense by $25,000.

Option 2 = The sales manager believes that a $5 decrease in the sales price per unit will result in a 10% increase in sales volume (units) from the Current Situation, however, this will need to be accompanied by $30,000 of increased advertising. Assume that the automation described above in Option 1 will be applied in this scenario as well.

Option 3 = If no additional dollars are spent for advertising, the sales manager predicts sales volume will drop 100 units from the Current Situation. Assume the same decrease in per unit variable costs, and increased depreciation expense, as in Options 1 and 2 above.

Perform the necessary calculations and answer the following quiz questions. Express your answers in whole dollars and be sure to include commas so that the autograder won't mark it incorrect. Do not include dollar signs please