2. Choman Company has developed a guitar that self-trains people to play like their favorite rock star. The company currently pays a production company to produce the guitar for them at a cost of $200 each. Other variable costs total $120 per guitar, and fixed expenses are $1,998,000. Choman currently sells the guitar for $500. NOTE: Solve each requirement as a separate situation and always go back to original data unless otherwise directed. Round all answers to nearest unit or nearest cent. a. Calculate Choman's annual breakeven point in units and in sales. b. Prove your answer in (a) by showing a condensed variable cost income statement. c. Assume Choman wants to earn a before-tax profit of $198,000. How many units must it sell? d. Prove your answer in (c) by showing a condensed variable cost income statement. e. Choman is considering raising its selling price to $520. Calculate the new breakeven point in units. f. Choman has found a new company to produce the trainer guitar at a lower cost of $175. Calculate the new breakeven point in units. g. Assume Choman has predicted demand for its guitars to be 12,000 units. What is the lowest price that can be charged in order to earn a $198,000 profit? Variable and Fixed costs will not change. h. Assume Choman can sell 13,000 units, but it needs to increase advertising costs in order to stimulate the extra demand. Assuming it still wants to earn a $198,000 profit, by how much can Choman increase advertising costs to help achieve its goal? Variable cost per unit will not change. i. Choman has run into supplier problems and will only be able to supply a total of 10,000 guitars to customers this year. Assuming it has already sold 2,000 guitars at the existing price, that it can reduce fixed costs by $100,000 and unit variable cost by $10, what will the new price need to be in order to still earn a $198,000 profit? j. Assume the same scenario as letter (c) but the $198,000 is after income tax profit. How many units must Choman sell? Assume an income tax rate of 40% on operating income.