Exceptional Scratching produces scratching posts for cats. The company sells the scratching posts to customer at a price of $50.00 each. Below are the cost of manufacturing, marketing and selling the scratching posts at a normal volume of 5,000 units per month. Unit manufacturing costs;: Variable materials $ 5.50 Variable labour $ 8.25 Variable overhead $ 4.20 Fixed overhead $ 6.60 Total unit manufacturing costs $ 24.55 Unit Marketing Cost Variable labour $ 4.00 Fixed labour $ 2.00 Tot unit marketing cost: $ 6.00 Unit Selling Cost Variable labour $ 3.75 Fixed labour $ 5.00 Total unit selling cost: $ 8.75 Total unit costs $ 39.30 Questions

1. What is the breakeven volume in units? In sales dollars

2. If Exceptional Scratching were to increase its monthly volume to 8,000 units, and decrease unit retail price to $40.50 per unit. Would you recommend this decision? Support your recommendation by showing your calculations.