Camden Graphics (CG) is small manufacturer of electronic products for computers with graphics capabilities. The company has been succeeded by being very innovative in product design CG's main product is a circuit board (CB3668) used in computers with enhanced graphics capabilities. Prices vary depending on the terms of sale and the size of the purchase. The average price for the product is $120. The firm expects to sell 150,000 units in the coming year. The future for CG looks very bright indeed, but it is new and has not developed a strong financial base. Cash flow management is a critical feature of the firm's financial management, and top management must watch cash flow numbers closely. At present, CG manufactures about seventy percent of the parts in this circuit board. CG management is considering a significant reengineering project to significantly change the plant and manufacturing process. The project's objective is to increase the number of purchased parts and to reduce the complexity of the manufacturing process. This would also permit CG to remove some leased equipment and to sell some of the most expensive equipment in the plant. The manufacturing costs for 150.000 units of CB3668 follow: Current manufacturing costs Proposed manufacturing costs Cost per unit: Material and purchased parts $ 6.50 $ 16.00 Direct labor $13.00 $ 14.00 Variable overhead (unit-level cost) $ 27.00 $ 32.00 Fixed overhead (facility-level cost) $31.00 $ 15.00 Additional manufacturing information: Number of setups 3.100 2,200 Cost per setup $300 $ 300 For each option, setup costs are assumed to be fixed within the manufacturing capacity. The variable general, selling and administrative (GSA) cost is $12 per unit, while the total fixed GSA cost is $1,300,000. The GSA costs are not expected to differ for either the current or the proposed manufacturing plan. Required: (Show calculations to earn points) Required: (Show calculations to earn points) 1. (6 points) Compute the breakeven point in units for CB3668 for each plan, the current plan and the proposed plan 2. 14 points) Determine the number of sales units (volume) at which CG would be indifferent between the current manufacturing plan or the proposed plan. Which plan has higher profit when sales volume is 150,000 units? 3. (4 points) Compute the degree of operating leverage for each plan when sales volume is equal to 150,000 units. Which option has a higher risk of losing? Why? Explain. 4. 3 points) Should CG undertake the proposed reengineering plan? Why or why not? Be sure to discuss your