Voltec Inc. has finished a new video game, Snowboard Challenge. Management is now considering its marketing strategies. The following information is available: Anticipated Sales Per Unit - $80 Variable Cost Per Unit - $35 Anticipated Volume - $1,000,000 Units Production Costs - $20,000,000 Anticipated Advertising - $15,000,000 Variable cost per unit includes the cost of the video game, packaging, and copying costs. Two managers, James Hamilton and Thomas Seymour, had the following discussion of ways to increase the profitability of this new offering: James: I think we need to think of some way to increase our profitability. Do you have any ideas? Thomas: Well, I think the best strategy would be to become aggressive on price. James: How aggressive? Thomas: If we drop the price to $60 per unit and maintain our advertising budget at $15,000,000, I think we will generate total sales of 2,000,000 units. James: I think that is the wrong way to go. You are giving too much up on price. Instead, I think we need to follow an aggressive advertising strategy. Thomas: How aggressive? James: If we increase our advertising to a total of $25,000,000, we should be able to increase sales volume to 1,400,000 units without any change in price. Thomas: I do not think that is reasonable. We will never cover the increased advertising costs. To help the president better understand your interpretation you'll need to establish a basis for your memo. Include the following responses within your memo. Determine the break-even point in units and dollars using each of the following approaches: **Use the contribution margin per unit approach **Use the equation method **Use the contribution margin ratio approach Which strategy is best: Do nothing? Follow the advice of Thomas Seymour? Or follow James Hamilton's strategy?