International Data Systems' information on revenue and costs is relevant only up to a sales volume of 110,000 units. After 110,000 units, the market becomes saturated and the price per unit falls from exist6.00 to exist4.80. Also, there are cost overruns at a production volume of over 110,000 units, and variable cost per unit goes up from exist3.00 to exist3.50. Fixed costs remain the same at exist60,000.
a. Compute operating income at 110,000 units.
b. Compute operating income at 210,000 units.