Zippo manufactures and Sells multiple products; however, each product is manufactured in a different factory and has separate financial statements. One of the products is a soft drink vnding machine that permits a customer to obtain multiple variations of the desired soft drink in one spot. The vending machines are typically sold to restaurants. The sales price of the vending machine is $4,500 each. Cost information is as follows: Variable manufacturing costs per unit 2.700 Annual fixed manufacturing costs 1,300,000 Sales commission 10% of sales price Annual fixed SG&A costs 500,000 Management's proft goal for the coming year is operating income of $1,000,000. 1. What is the number of units needed to achieve breakeven? 2. Budgeted sales for the coming year are $6.75 million. What is the margin of safety ratio? 3. What is the number of units needed to achieve the target operating income? Are they expected to achieve their targeted operating income based on budgeted sales? 4. The company currently only operates in the Midwest. It is considering expanding to the Southwest. As part of this push, Zippo will incur increased marketing costs of $300.000 and reduce the sales price to $4,000. Unfortunately, they wil need to provide the price concession to its existing customers. Overall, management expects that sales will double to 3,000 units per year. What is the impact of the new strategy on operating income? Should the company adopt the new strategy? Why or why not