Reveen Products sells camping equipment. One of the company's products a lantern sells for $100 per unit. Variable expenses are $60 per lantern, and fixed expenses associated with the lantern total $120,000 per month.

1. compute the company's break even point in number of lanterns and total sales dollars.

2. If the variable expenses per lantern increase as a percentage of the selling price will it result in a higher or lower break even point? Why?

3. At present the company is selling 60,000 lanterns per month. The manager is convinced that a 10% reduction in selling price will result in a 25% increase in the number of lanterns sold each month. Prepare 2 contribution statements.

4. Refer to the date in #3 above . How many lanterns would have to be sold at the new selling price to yield a minimum net operating income of $60,000 per month?