. Owly Corporations furniture division is looking for ways to increase profits from their top of the line office chair, WorkNest Supreme. The current wholesale selling price is $250 with a gross margin of 40%. Fixed manufacturing overhead accounts for 20% of the manufacturing cost per chair. There are no variable selling or administrative expenses. Current fixed manufacturing overhead and selling and administrative expenses for the WorkNest Supreme are $4,355,000.

To increase profits Owly is considering adding a T.E.N.S. device to the WorkNest Supreme. This T.E.N.S. device will cost an additional $45 per unit, which is all variable cost (the dollar amount of fixed manufacturing overhead per chair will not change). Owly will increase the selling price of the chair to $300. Total fixed manufacturing overhead and selling and administrative expenses will increase to $4,684,500.

A. What is the breakeven in units with the current design of the chair?

B. What is the breakeven in units for the improved chair with the T.E.N.S. device?

C. If Owly desires a profit of $2,340,000 from WorkNest sales, what does sales revenue need to be under the current design of the chair?

D. If Owly desires a profit of $2,340,000 from WorkNest sales, what does sales revenue need to be under the improved chair with the T.E.N.S. device?