Required: 1. Compute the break-even point in units for Plan A and Plan B. PR 7.39 (Static) Leverage; Analysis of Operating Change (LO 7-1, 7.4, 7.8) [The following information applies to the questions displayed below.] Consolidated Industries is studying the addition of a new valve to its product line. The valve would be used by manufacturers of irrigation equipment. The company anticipates starting with a relatively low sales volume and then boosting demand over the next several years. A new salesperson must be hired because Consolidated's current sales force is working at capacity. Two compensation plans are under consideration: Plan A: An annual salary of $22,000 plus a 10% commission based on gross dollar sales. Plan B: An annual salary of $66,000 and no commission. Consolidated Industries will purchase the valve for $50 and sell it for $80. Anticipated demand during the first year is 6,000 units. (In the following requirements, ignore income taxes.) 4. Assume that a general economic downturn occurred during year 2 , with product demand falling from 6,000 to 5,000 units. Determine the percentage decrease in company net income if Consolidated had adopted Plan A. 3-a. Compute the operating leverage factor of both plans at the anticipated demand of 6,000 units. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places. 3-b. Which of the two plans has a higher operating leverage factor? 5. Assume that a general economic downturn occurred during year 2 , with product demand falling from 6,000 to 5,000 units. Determine the percentage decrease in company net income if Consolidated had adopted Plan B. Note: Round your answer to 1 decimal place (0.123=12.3%)