As an alternative to subcontracting, the company can lease a plant for the year for $122,400.

Total variable costs under this arrangement would be $2.40 per unit.

(a) Determine the break-even point in units under the initial budget.

(b) Calculate the margin of safety at the 25,000-unit level.

(c) Determine the break-even point in units under the lease arrangement.

(d) Determine whether the lease should be taken.

(e) Calculate the point of indifference between the subcontracting plan and the lease plan

i.e., the volume level in units where the profit under each plan would be equal.