Delta Safety Systems manufactures a component used in aircraft radar systems. The firm’s fixed cos P : : Cost-Volume-Profit are $3,000,000 per year. Delta’s variable cost of each component is $3,000, and it sells the component (LO 2,3) v for $5,000 each. The company sold 2,000 components during the prior year. ey aR Required eXcel mhhe.com/hilton4e Exercise 12.3]

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a. Compute the break-even point in units.

b. Suggest several possible actions that management can take if it wants to decrease the break-even point. me

c. The sales manager believes that a reduction in sales price to $4,500 will result in orders for 1,000 more components each year. In comparison with last year’s results, will the company benefit if it changes the price? Show calculations to support your answer.