Bigtower Corporation produces and sells clocks. It projects the following information for next year.

Sales price per unit $ 100

Variable production cost per unit 80

Fixed production costs (total) 500,000

Variable selling costs per unit 8

Fixed selling costs (total) 300,000

Required:

Determine the breakeven point in dollars.

What will Bigtowers pretax profit be at 50,000 units; and at 80,000 units?

Bigtower is subject to a tax rate of 20 percent. If the CEO wants an after-tax profit of $300,000, how many units must it sell?

Bigtower is considering an alternative strategy to reduce fixed production costs by $100,000; however, this would cause variable production costs to increase to $90 per unit. What is the new breakeven point in units? Should Bigtower adopt the new strategy?