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Fry Corporation developed the following income statement using a contribution margin approach: Fry Corporation Projected...

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Accounting

Fry Corporation developed the following income statement using a contribution margin approach:
Fry Corporation
Projected Income Statement For the Current Year
Line Item Description Amount Amount
Sales (6,000 units) $288,000
Less variable costs:
Variable manufacturing costs $65,500
Variable selling costs 35,000
Total variable costs 100,500
Contribution margin $187,500
Less fixed costs:
Fixed manufacturing costs $117,000
Fixed selling and administrative costs 42,500
Total fixed costs 159,500
Operating income $28,000
Required:
A. Determine the break-even point in sales dollars. Round units Up to next whole unit. Use rounded amount in subsequent computations.
fill in the blank 1 of 3$
For B-C, round final answer to the nearest whole dollar.
B. The sales manager believed the company could increase sales by 350 units if advertising expenditures were increased by $22,500. By how much will the operating income increase or decrease if the advertising is increased as suggested?
fill in the blank 2 of 3$
C. What is the maximum amount the company could pay for advertising if the advertising would increase sales by 350 units?
fill in the blank 3 of 3$

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