ACCT 2301 Sensitivity Analysis Handout 12 A Tainan Company is considering adding a new product. The cost accountant has provided the following data. Expected variable cast of manufacturing Expected annual fixed manufacturing costs S47 per unit 578,000 The administrative vice president has provided the following estimates. Expected sales commission Expected annual fixed administrative costs $3 per unit $12,000 The manager has decided that any new product must at least break even in the first year. Required: Consider each requirement separately. a. If the sales price is set at $65, how many units must Tainan sell to break even? b. Tainan estimates that sales will probably be 10,000 units. What sales price per unit will allow the company to break even? c. Tainan has decided to advertise the product heavily and has set the sales price at $66. If sales are 12,000 units, how much can the company spend on advertising and still break even? 131