Dennis Williams is projecting the coming year’s net income potential for Williams Paint. The paint is sold for

\($15.00\) a gallon. Variable costs per gallon are \($10.00\), and annual fixed costs are \($135,000.00\). Complete each of the following instructions independently of the others.

Instructions:

1. Calculate the

(a) unit sales and

(b) sales dollar breakeven points.

2. If a \($50,000.00\) annual net income is planned, calculate the required

(a) number of gallons of paint to be sold and

(b) sales dollars.

3. Dennis plans to purchase a new paint mixing machine that would reduce the cost of paint by \($0.50\) per gallon but increase annual fixed costs by \($52,000.00\). Calculate the

(a) unit sales and

(b) sales dollar breakeven points. Should Dennis purchase the mixing machine? Explain your answer.