A company reports the following contribution margin income statement. Contribution Margin Income Statement For Year Ended December 31 Sales (21,200 units at $27.50 each) $ 583,000 Variable costs (21,200 units at $22.00 each) 466,400 Contribution margin 116,600 Fixed costs 74,200 Income $ 42,400 The manager believes the company can increase sales volume to 25,000 total units by increasing advertising costs by $25,800.

Compute the break-even point in sales dollars if the company increases advertising costs by $25,800.

Prepare a contribution margin income statement assuming the company incurs the additional advertising costs and sales volume increases to 25,000 units.

Contribution Margin Income Statement
For Year Ended December 31
Sales
Variable costs
Contribution margin
Fixed costs
Income