Alliance Enterprises is considering extensively modifying their manufacturing equipment. The modifications will result in less wastage of materials, which will reduce variable manufacturing costs and introduce changes to the production process that will improve product quality. This will allow Alliance to increase the selling price of the product. Annual fixed costs are expected to increase to $750,000 if the modifications are made. Expected fixed and variable costs as well as the selling prices are shown below: Cost Item Selling price per unit Variable cost per unit Fixed costs Existing Equipment Modified Equipment 18 14 360,000 20 14 750,000 Required 1. Determine the break-even point in units for the two machines Break-Even Point Existing equipment Modified equipment units units 2. Determine the sales level in units at which the modified equipment will achieve a 10% target profit-to- sales ratio (ignore taxes) units