Zimmerman Company records the following costs associated with the production and sale of a steel slingshot:

that in 2000 the beginning and ending inventories were the same. Also assume that 2000 sales were 11,000 units at $\$ 11.50$ per slingshot.

Required: 1. Prepare a contribution margin income statement.

2. Determine the break-even point in sales dollars.

3. Interpretive Question: Zimmerman believes that sales volume could be improved 20 percent if an additional commission of $\$ 0.50$ per unit were paid to the salespeople. Zimmerman also believes, however, that the same percentage increase could be achieved through an additional $\$ 3,000$ investment in advertising. Which action, if either, should Zimmerman take? Why?