To-Air-is-Human, Inc. (TAH) manufactures lightweight unpowered and human-powered aircraft. They have decided to produce a brand-new low-cost two-seater glider kit for the consumer market, which they will sell direct to the consumer. They will have a dedicated facility that they rent for $100,000 for the year. They will also rent two large molding machines for fabrication of the glider hull at $4500 apiece. The production line will be manned by four skilled workers, whose salaries total $115,000 for the year. Hull parts will total 680 lbs. of high-grade aluminum, which may be purchased at a delivered price of $2300/ton. Other parts will be contracted for inclusion in the kit: four windows per plane at $95 per window, two padded seats (with built-in seat assembly) at $110 apiece, steering mechanism at $225, all ailerons and louvers in a set for $400, and fixed landing gear for $175. The crate for shipping the product costs $40 for a single kit, and all shipping costs are assumed by the consumer. Advertising in a glider enthusiast magazine costs $500 for the year. The advertised price will be $6999. How many glider kits does TAH have to sell in order to break even?

Follow up question: Neiman-Marcus wants to sell the TAH glider exclusively through their upscale Christmas catalog, and is willing to buy 120 of them from TAH, if TAH will chip in $16,000 for the catalog distribution. If all other parameters (except Q , of course, and the fact that they would no longer advertise in the magazine) from part A are the same, what breakeven price should TAH charge Neiman Marcus?