Richards Ltd has prepared the following draft profit analysis for the current year:

Sales (15 000 units) Variable expenses	$	600000 345000
Contribution margin Fixed expenses		255000 108800
Profit before tax Tax (at 30%)		146200   43860
Profit after tax	$	102340

Required

Answer each of the following four independent situations:

A. If the company’s manager is considering increasing his salary by $34 000, how much must dollar sales increase to maintain the company’s current after-tax 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 will not change. Round your answer to the nearest dollar.

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