GameFan Inc. manufactures game systems. GameFan has decided to create and market a new system with wireless controls and excellent video graphics. GameFan's managers are thinking of calling this system the Yew. Based on past experience, they expect the total life cycle of the Yew to be four years, with the design phase taking about a year. They budget the following costs for the Yew: (Click the icon to view the budget.) Required Requirement 1. Suppose the managers at GameFan price the Yew game system at $76 per unit. How many units do they need to sell to break even? (Round your answer up to the nearest whole unit.) GameFan will need 1207742 units to break even. Requirement 2. The managers at GameFan are thinking of two alternative pricing strategies. (a) Sell the Yew at $76 each from the outset. At this price, they expect to sell 1,560,000 units over its life cycle; (b) Boost the selling price of the Yew in year 2 when it first comes out to $88 per unit. At this price, they expect to sell 1,080,000 units in year 2. In years 3 and 4, drop the price to $76 per unit. The managers expect to sell 325,000 units in years 3 and 4. Which pricing strategy is recommended? Explain. In order to effectively answer this question, we must first determine the operating income under each option. First, calculate the life cycle operating income (loss) for option (a). (Enter operating losses with parentheses or a minus sign.) Projected Life Cycle Statement of Comprehensive Income Revenues Variable costs Fixed costs Life cycle operating income (loss) Budget Total fixed costs Variable cost over four years per unit Year 1 Year 1 Years 2-4 R&D costs 7,100,000 Design costs 1,640,000 Production 20,200,000 $34 per unit Years 2-4 Marketing and distribution 6,150,000 11 per unit Years 2-4 Customer service 2,350,000 -