Seth Corporation produces a molded plastic casing, M&M101, for many cell phones currently on the market. Summary data from its 2017income statement follows. Karen Buckner, Seth's president, is very concerned about Seth Corporation's poor profitability.

She asks Terrence Hyde, production manager, and Daryl Vang, controller, to see if there are ways to reduce costs. After 2 weeks, Terrence returns with a proposal to reduce variable costs to 61% of revenues by reducing the costs Seth currently incurs for safe disposal of wasted plastic. Daryl and Terrence have the following conversation: Daryl is concerned that this would expose the company to potential environmental liabilities. He tells Terrence, "We would need to estimate some of these potential environmental costs and include them in our analysis." "You can't do that," Terrence replies. "We are not violating any laws. There is some possibility that we may have to incur environmental costs in the future, but if we bring it up now, this proposal will not go through because our senior management always assumes these costs to be larger than they turn out to be. The market is very tough, and we are in danger of shutting down the company and costing all of us our jobs. The only reason our competitors are making money is because they are doing exactly what I am proposing."

$ Revenues 5,000,000 Variable costs 3,500,000 1,560,000 Fixed costs $ (60,000) Operating income 1 Calculate Seth Corporation's breakeven revenues for 2017. 2. Calculate Seth Corporation's breakeven revenues if variable costs are 61% of revenues 3 Calculate Seth Corporation's operating income for 2017 if variable costs had been 61% of revenues 4. Given Terrence Hyde's comments, what should Daryl Vang do