only 2 questions they are appart of the same problem

Looking at Washburn's financial data for its present plant, Abel estimates that this line of guitars must bear these fixed cr In addition, he estimates the variable costs for each unit to be: Direct materials =$25 /unit Direct labor =15 hours unit @ $8 hour 1. In Washburn's factory, what is the break-even point for the new line of guitars if the retail price is: (note: Washburn is a manufacturer, not a retailer-therefore you must figure out from the case what Washburn will charge retailers in order to answer the questions below.). (a) $349, (b) \$389, and (c) \$309? Also, (d) if Washburn achieves the sales target of 2,000 units at the $349 retail price, what will its profit be? 2. Assume that the merger with Parker leads to the cost reductions projected in the case. What will be the (a) new break-even point at a $349 retail price for this line of guitars and (b) new profit if it sells 2,000 units? Setting prices for its various lines presents a continuing challenge for.Washburn. Not only do the prices have to reflect the changing tastes of its various segments of musicians, but the prices must also be competitive with the prices of other guitars manufactured and marketed globally. The price elasticity of demand, or price sensitivity, for Washburn's products varies between its segments. To reduce the price sensitivity for some of its products, Washburn uses endorsements by internationally known musicians who play its instruments and lend their names to lines of Washburn signature guitars. Stars playing Washburn guitars, such as Nuno Bettencourt of Extreme, Paul Stanley of KISS, Scott Ian of Anthrax, and Dan Donegan of Disturbed, have their own lines of signature guitars - the "batch-cstom" units mentioned earlier. These guitars receive excellent reviews. Total Guitar magazine, for example, recently said, "If you want a truly original axe that has been built with great attention to detail ... then the Washburn Maya Pro DD75 could be the one." Bill Abel, Washburn's vice president of sales, is responsible for reviewing and approving prices for the company's lines of guitars. Setting a sales target of 2,000 units for a new line of guitars, he is considering a suggested retail price of $349 per unit for customers at one of the hundreds of retail outlets carrying the Washburn line. For planning purposes, Abel estimates half of the final