=+7-22 K Life-cycle product costing OBJECTIVE 5 Insync Ltd manufactures game systems. Insync Ltd has decided to create and market a new system with wireless controls and excellent video graphics. Insync Ltd’s managers are thinking of calling this system the Boast. Based on past experience they expect the total life cycle of the Boast to be four years, with the design phase taking about a year. They budget the following costs for the Boast:

Total fixed costs over four years Variable cost per unit Year 1 R&D costs $6 590 000 —

Design costs 1 450 000 —

Years 2–4 Production 19 560 000 $50 per unit Marketing & distribution 5 242 000 10 per unit Customer service 2 900 000 —

Required 1 Suppose the managers at Insync Ltd price the Boast game system at $110 per unit. How many units do they need to sell to break even?