Break-Even Sales and Cost-Volume-Profit Graph Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were...

Break-Even Sales and Cost-Volume-Profit Graph

Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.

Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year.