Martin Corporation sells component parts for the electronics industry.Martin Corporation currently sells 160,000 units per year at a price of $6.50 per unit; its variable cost is $4.00 per unit; and fixed costs are $350,000 for the year.Martin is considering expanding into two additional states, which would increase its fixed costs to $570,000 and would increase its variable unit cost to an average of $4.24 per unit.If Martin expands, it expects to sell 250,000 units at $7.10 per unit.

1.How much operating profit (EBIT) is Martin Corporation currently realizing, with a sales volume of 160,000

units per year?

a.What is Martin Corporation's current breakeven point in terms of:

1.Quantity:

2.Sales Dollars:

2.How much operating profit (EBIT) would Martin Corporation realize under the expansion proposal?

a.What would be Martin's new breakeven point in terms of:

1.Quantity:

2.Sales dollars:

3.Based on the above analysis, what recommendation would you make to Martin Corporation with

regard to their proposed expansion plan?