1. Myers Corporation is attempting to develop and market a new garden tractor. Fixed cost to develop and produce the new tractor are estimated to $10,000,000 per year. The variable cost to make each tractor has been estimated at $2000. The marketing department has recommended a price of $4000 per tractor.

1. What is the breakeven level of output for the new tractor.

2. What if management expects to generate a target profit (EBIT) of $2,000,000, how many tractors must be sold.