Allen & Co. sold 40,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown below. During a planning session for the year 2018's activities, the production manager notes that variable costs can be reduced by 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs of $20,000. The maximum output capacity of the company is 60,000 units per year.

Contribution Margin Income Statement For the Year Ended December 31, 2017
Sales	$1,000,000
Variable Costs	800,000
Contribution Margin	200,000
Fixed Costs	250,000
Net Loss	(50,000)

1. Compute the break-even point in dollar sales for 2017.

2. Compute the predicted break-even point in dollar sales for 2018 assuming the machine is installed and there is no change in the unit selling price or the number of units sold.

3. Compute the predicted net income/loss for 2018 using the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change and no income taxes will be due.

4. Compute the sales level required in dollars to earn $100,000 of target pretax income in 2018 with the machine installed and no change in the unit sales price. Round answers to whole dollars.

5. Compute the sales level required in units to earn $100,000 of target pretax income in 2018 with the machine installed and no change in the unit sales price. Round answers to whole units.