GameFan Inc. manufactures game systems. They have decided to create and market a new system with wireless controls and excellent video graphics. Based on past experience, they expect the total life cycle of the new system to be four years. The design period will be one year. During this design period there will be no revenues. The budget for the new system: Variable cost per unit Fixed costs over the four year period $6,620,000 Year 1 Years 2-4 Research and development Production Marketing and distribution Customer service $19,630,000 $5,256,0000 $65 per unit $22 per unit $3,200,000 1. Compute the number of units to breakeven if the selling price is $150 per unit? 2. The managers are considering two alternative pricing strategies. a. Sell the system at $150 per unit. Expected sales are 1,830,000 units over the life cycle. b. Sell the system for $270 in year 2. Set the price in years 3 and 4 at $150 per unit. Sales for year 2 are expected to be 130,000 units, year 3 and 4 total sales combined would be 1,500,000 units