Last year Minden Company introduced a new product and sold 15,500 units of it at a price of $82 per unit. The product's variable expenses are $52 per unit and its fixed expenses are $513,000 per year.

Required:

What was this product's net operating income (loss) last year?

What is the product's break-even point in unit sales and dollar sales?

Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., $80, $78, etc.), what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit?

What would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3?