A. This is the difference in the revenue from April to May caused by the increase in sales volume in May. However, increased revenue does not all flow to the operating income line, as there will be increased variable costs associated with the additional units sold.

B. This is the amount of fixed costs per month.

C. Since the contribution margin ratio is 45%, the unit contribution margin is $30 × .45, or $13.50. Fixed costs do not change in total with changes in volume, as long as the volume remains within the relevant range. Here, we assume that it does, since the problem does not say differently. Therefore, the additional contribution margin earned for the additional 1,000 units sold in May flowed straight to the operating income line, with no reduction for fixed costs. May income before taxes was thus greater than April income by $13.50 × 1,000 units, or $13,500.

D. This answer results from using the variable cost ratio of 1 - .45 as the contribution margin ratio, instead of the contribution margin ratio of .45.