Rundle Company is considering adding a new product. The cost accountant has provided the following data:

Expected variable cost of manufacturing $$42$ per unit

Expected annual fixed manufacturing costs $$65,000$

The administrative vice president has provided the following estimates:

Expected sales commission $$7$ per unit

Expected annual fixed administrative costs $$31,000$

The manager has decided that any new product must at least break even in the first year.

Use the equation method and consider each requirement separately.

If the sales price is set at $$73,$ how many units must Rundle sell to break even?

Rundle estimates that sales will probably be $8,000$ units. What sales price per unit will allow the company to break even?

Rundle has decided to advertise the product heavily and has set the sales price at $$75.$ If sales are $14,000$ units, how much can the company spend on advertising and still break even?