Rollo Company assembles and sells lawn carts for $50 each. Each cart requires direct materials costing $30. Rollos only other expenses are the salary paid to its employees (120,000 per year) and depreciation expense of $40,000 per year

1. How many carts must Rollo sell to earn next income of $240,000 for the year?

2. Assume that Rollo reduces its selling price from $50 to $40 for each cart. What will its breakeven point be in sales dollars?