Suppose a company has a fixed cost of $120,000 and a variable cost per unit of $12. It sells its product for $17.

1. Calculate its break-even level of output.
2. Calculate how much it must produce to make $70,000, assuming it can sell it all.
3. At an output level of 35,000 units, if it can buy the product wholesale from a distributor at $14 each, should it outsource or produce the product itself?