Amelia, the CEO of a manufacturing company, decided to expand the product offering of her business to include the manufacture of a specialized automotive unit. To include this product, her business would incur fixed costs of $120,000 per year and variable costs of $750 per unit. She plans to sell each unit for $1250.

a. Calculate the number of units she would have to manufacture to break even.

b. While manufacturing the unit, she realized that she required an additional fixed cost of $3000 per year, and also realized that to be more competitive in the market she had to reduce the selling price by 20%. Calculate the new break-even quantity.

AppendixLO1