Kantola Oy is a family business in Seinajoki - Finland that specialize in manufacturing and selling diesel engines. These engines are used as small farming equipment by local and international farmers. For its 2020 budget. Kantela Oy estimates the following: Selling price $ 7,000 Variable cost per engine $ 2,000 Annual fixed costs $5,560,000 Net income $ 900,000 Income tax rate 40% However, when the income statement, as of March 31 was prepared, the finance department noticed that the sales were not meeting the expectations. During the first quarter, Kantola Oy sold only 300 units mostly to their customers in Russia and Estonia at the current price of $7,000. The income statement showed that variable and fixed costs were as planned. Which means if Kantola Oy senior managers do not act quickly, the 2020 annual net income projection would not be met. A management committee was formed and presented the following mutually exclusive alteratives to the president: When the income statement was prepared at the end of March, details showed that the amount sales were not meeting what the expectation. During the first 3 months of the year, 300 units had been sold at the current price of $7,000. However, the income statement showed that variable cost and fixed cost were as planned, which meant that the 2020 annual net income projection would not be met unless the senior executive of the company act. A committee was formed and the following mutually exclusive alternatives were presented to Jussi Kantola, the CEO of Kantola OY: Alternative a: The Kantola Oy committee propose a reduction of the selling price by 15% According to the Sales Team forecast with this significance reduction of the price. 1,400 units can be sold during the remainder of the year. Total fixed costs and variable cost per unit will stay as budgeted. Alternative b: The Kantola OY committee propose that the variable cost per unit is lowered by $750 through the use of less-expensive direct materials. They suggest that the selling price be reduced by $800, and sales of 1,130 units are expected for the remainder of the year. Alternative c: The Kantola Oy committee propose that the fixed costs be reduced by 5% and the selling price be lowered by 25%. While the variable cost per unit will be unchanged a Sales of 1,500 units are expected for the remainder of the year. Required: 1. Assuming that no changes are made to the selling price or cost structure, calculate the number of units that Kantola Oy must sell a) to break even and b) to achieve its net income objective. 2. Determine which alternative Kantola Oy should select to achieve its net income objective. Show your calculations.