Lawsistan Ltd has prepared the following draft profit analysis for the current year.

Sales (150000 units) Variable expenses	$	1200000   690000
Contribution margin Fixed expenses		510000   217600
Profit	$	292400

Required

Answer each of the following four independent situations:

A. If the company’s manager is considering increasing his salary by $42 500, how much must dollar sales increase to maintain the company’s current profit?

B. If the company changes its marketing approach, it is expected that variable expenses will increase 10%, fixed expenses will decrease 15% and sales units and dollars will increase 20%. Calculate the company’ break-even point in terms of sales dollars if the new strategy is adopted. Assume that the sales price per unit would not be changed. Round your answer to the nearest dollar.

C. If the company decreases sales commissions, variable expenses will decrease by 10%. The company believes that unit sales will decrease 5% because of a loss of sales representatives, even though the company plans to increase its advertising budget by $25 000. Should the company decrease the sales commissions?

D. If the company’s profit increases 100% next year because of a 35% increase in sales, will performance be better or worse than expected? Assume adequate capacity exists to meet the increased volume without increasing fixed costs.