Canta Corporation manufactures and sells a special kind of ball bearing. Its cost structure depends on the number of bearings it produces. Its fixed costs and variable manufacturing cost per unit for different ranges of production are described in the following table:

Production Range in Units	Fixed Costs	Variable Manufacturing Cost per Unit
13,000	$250,000	$75
3,0016000	$350,000	$50
6,00110,000	$750,000	$25

Cantas sales director believes the company can sell

1. 2,500 units at a selling price of $300; or
2. 5,000 units at a price of $200; or
3. 8,000 units at a price of $175. If it chose to sell 8,000 units, however, it would incur additional advertising costs of $50,000 and variable selling costs of $5 per unit.

Do you recommend that Canta Corporation plan to produce and sell (a) 2,500 units (b) 5,000 units, or (c) 8,000 units? Explain. (Hint: calculate OI under each condition to support your recommendation; label your answers)