International Data Systems' information on revenue and costs is relevant only up to a sales volume of 108,000 units. After 108,000 units, the market becomes saturated and the price per unit falls from $20.00 to $11.80. Also, there are cost overruns at a production volume of over 108,000 units, and variable cost per unit goes up from $10.00 to $10.25. Fixed costs remain the same at $58,000.
a. Compute operating income at 108,000 units.
Operating income
b. Compute operating income at 208,000 units.
Operating income
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