At what level of sales would Strawberry, Inc. have the same EBIT under both cost structures (pre- and post-R&D expansion)?

First, let's set up the EBIT computations under each cost structure.

EBIT_{pre-expansion} = $350*Q - $75,000,000 - $50*Q;

EBIT_{post-expansion} = $350*Q - $120,000,000 - $30*Q.

Now, to find the number of units sold that results in the same EBIT under either cost plan, we need to set these two equal to each other and solve for Q (quantity):

$350*Q - $75,000,000 - $50*Q = $350*Q - $120,000,000 - $30*Q;

-$75,000,000 + $120,000,000 = $350*Q - $350*Q + $50*Q - $30*Q;

$45,000,000 = $20*Q;

Q = $45,000,000/$20 = 2,250,000 units.

Thus, if Strawberry, Inc. expects sales in excess of 2.25 million units (assuming the price stays at $350/unit), the R&D expansion is justified.

Based on the last example, EBIT for the level of sales of 2.25 million units under either cost structure is $ ?

million.