The 2012 pro-forma income statement for Grover Company is as follows (ignore taxes):

Required:
1. Compute how many units must be sold to break even.
2. Compute the increase (decrease) in profit under the following independent situations:
a. Sales increase 25%.
b. Fixed selling and administrative expenses decrease 5%.
c. Contribution margin decreases 20%.
3. Compute sales in units and dollars at the break-even point if fixed costs increase from
$79,000 to $85,000.
4. Compute the number of units that must be sold if expected profit is $1million.

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Grover Company Pro-Forma Income Statement For the Year Ended December 31, 2012 Sales (20,000 units) Cost of goods sold: Direct materials. $170,000 $16,000 27,000 6,000 2,000 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost of goods sold Gross margin - Selling expenses: Variable. 51,000 si19,000 S20,000 45,000 Fixed Administrative expenses: 8,000 32,000 Variable. Fixed Total seling and administrative expenses 105,000 S 14,000 Profit