cost value pricing

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CVP Question Catalonia Company (CC) makes silicon wafers that its salespeople sell B-to-B for $100/wafer. All salespeople get a commission equal to 10% of the revenue from the wafers they sell, and in addition, the salespeople receive a base salary of $40,000 per person. In 2017, CC had 10 sales people, and its total sales revenue was $10,000,000. The manufacturing facility used to make the wafers has a fixed cost of $2,000,000, and a variable cost of $30/wafer. CC has no other costs or revenues other than those just described. For 2018, CC plans on modifying both its production facilities and the method by which it compensates its salespeople. The modified production facilities will increase its 2017 fixed manufacturing costs by $1,000,000 (for a total of $3,000,000 in fixed manufacturing costs), but it will reduce the variable cost per wafer to $20/wafer. CC intends to retain its existing sales staff, and not hire any more, but it intends to increase their commissions to 15% of sales revenue they generate (instead of the previous 10%). The salespeoples base salary will remain unchanged from its 2017 levels, as will the wafers selling price. Please answer both of the following questions: 1. Will CCs breakeven level of sales (expressed in dollars of sales revenue) for 2018 be higher or lower than in 2017? Support your answer with computations. 2. What level of sales also (expressed in dollars) will CC have to achieve in 2018 to generate the same direct (aka: variable) costing income that it achieved in 2017?