5. During its first year operations, the Sub-ray Corporation produced the following income statement results.

Net Sales $300,000

Cost of goods sold -180,000

Gross profit 120,000

General and administration -60,000

marketing expenses -60,000

Depreciation -20,000

EBIT -20,000

Interest expenses -10,000

Earning before taxes -30,000

Income taxes -0

Net earning (loss) 30,000

Cost of goods SOLD ARE EXPECT TO VARY WITH SALES AND BE A CONSTANT PERCENTAGE OF SALES. the GENERAL AND ADMINISTRATIVE EMPLOYEES HAVE BEEN HIRE AND ARE EXPECTED TO REMAIN A FIXED COST. marketing EXPENSES ARE ALSO EXPECTED TO REMAIN FIXED BECAUSE THE CURRENT SALES STAFF MEMBERS ARE EXPECTED TO REMAIN ON FIXED SALARIES AND NO NEW HIRES PLANNED. THE EFFECTIVE TAX RATE IS EXPECTED TO BE 30 PERCENT FOR A PROFITABLE FIRM.

A. Estimate the survival or EBDAT breakdown amount in terms of survival revenues necessary for the Sub-Ray Cooperation to break even next year.

B. Assume that the product selling price is $50 per unit. Calculate the EBDAT break-even point in terms of the number of units that will have been-sold next year.