Ethan owns a company that makes high-end childrens toys. One of the companys products is a painted wooden rowboat that is currently manufactured overseas. The company sells the rowboat for $130. Costs are as follows:

Variable Manufacturing Costs ........ $60.00

Variable Selling Costs $35.00

Variable Administrative Costs ... $25.00

Fixed Costs . $240,000

Required:

1. Calculate the breakeven in units.
2. What is the breakeven (or amount of revenue needed to earn) in sales dollars if the company wants to have $150,000 in profits?
3. The company has decided to manufacture all products locally rather than manufacturing them overseas. The sales manager has determined the company could raise the price to $160 per rowboat by marketing that they were "made in America." Direct labor costs would increase the variable manufacturing costs to $75 per unit. Variable selling costs would drop to $10 per unit due to reduced shipping costs. Administrative costs will stay the same. Fixed costs will increase by $50,000. Based on this scenario should the company start making the products in the United States rather than overseas.