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$1.$ Break$-$even in units $($Fixed costs $/$ Contribution margin per unit$).$

$2.$ Units needed to obtain targeted profit $=($Total fixed costs $+$ Targeted profit$)/$ Contribution margin per unit.

Prepare a variable$-$costing income statement to verify your answer.

Reagan, Inc.

Variable$-$Costing Income Statement

$3.$ Suppose that Reagan would like to lower the break$-$even units to $9,750.$ The company does not believe that the price or fixed cost can be changed. Calculate the new unit variable cost that would result in break$-$even units of $9,750.$ If required, round your intermediate computations and final answer to the nearest cent. $\backslash$$

$4.$ What is Reagan's current contribution margin and operating income?

$3.$ Suppose that Reagan would like to lower the break$-$even units to $9,150.$ The company does not believe that the price or fixed cost can be changed. Calculate the new unit variable cost that would result in break$-$even units of $9,750.$ If required, round your intermediate computations and final answer to the nearest cent. $\backslash$$

$4.$ What is Reagan's current contribution margin and operating income?

Current contribution margin

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Current operating income

Calculate the degree of operating leverage. Round your answer to three decimal places.

If sales increased by $10$ percent next year, what would the percent change in operating income be$?$ Use your rounded answer to the question above in your computations, and round your final percentage answer to two decimal places $($for example, $\backslash (45\mathrm{.}555\backslash \%\backslash )$ would be entered as $"45\mathrm{.}56").$

$\backslash \%$

What would the new total operating income for next year be$?$ Round your answer to the nearest dollar.

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$5.$ Reagan, Inc., has used data on the Tuff$-$Pup to answer a number of different questions. Identify the data analytic type $($descriptive$,$ diagnostic, predictive, or prescriptive$)$ that Reagan used to answer these questions. $($See Exhibits $2\mathrm{.}5$ and $2\mathrm{.}6,$ for a review of data analytic types. Note: More than one analytic type might apply.$)$

$\backslash (\backslash$checkmark $\backslash )$ analysis will help Reagan understand the break$-$even point and units needed to earn a target profit.

Predictive $\backslash (\backslash$quad $\backslash$checkmark $\backslash )$ analysis helps Reagan to understand what happens when variables are changed.