Carter Company's most recent contribution format income statement is presented below:

Sales $2,000,000

Less variable expenses 800,000

Contribution margin 1,200,000

Less fixed expenses 950,000

Net Income $250,000

The company sells its only product for $80 per unit. There were no beginning or ending inventories. Required: (2 marks each) a. Compute the company's break-even point in units sold.

b. Compute the total variable expenses at the break-even point.

c. How many units would have to be sold to earn a target profit of $500,000?

d. The sales manager is convinced that a $100,000 increase in the advertising budget would increase total sales by $250,000. Would you advise the increased advertising outlay?