Sockerville machine shop fabricates polished steel casings. They currently sell 9,000 casings at a selling price of $80.They have the following cost structure:

Variable costs per unit

$30

Fixed costs

$300,000

Required (each requirement is independent):

a.What is the breakeven point in units?

Break-even point in units:

b.Suppose that if they decrease their price to $70, they could increase sales by 20%. What would the change in profit be if they decrease their price to $70?

Change in profit if price is $70

(be sure to say whether profit increases or decreases):

c.What is the minimum price that Sockerville would be willing to charge in order to achieve an increase in unit sales of 20% (round to the nearest cent)?

Minimum price for increase in unit sales of 20%:

d.Suppose that Sockerville can purchase a machine that would increase fixed costs to $400,000 and decrease unit variable costs to $25 per unit.At what level of production and sales would Sockerville be indifferent between the old machine and the new machine?

Level of production and sales (in units):

Show computations here: