Analyzing sales price and fixed cost using the equation method Tainan Company is considering adding a new product. The cost accountant has provided the following data.

The administrative vice president has provided the following estimates.

The manager has decided that any new product must at least break even in the first year.
Required
Use the equation method and consider each requirement separately.
a. If the sales price is set at $65, how many units must Tainan sell to break even?
b. Tainan estimates that sales will probably be 10,000 units. What sales price per unit will allow the company to break even?
c. Tainan has decided to advertise the product heavily and has set the sales price at $66. If sales are 9,000 units, how much can the company spend on advertising and still break even?

Expected variable cost of manufacturing Expected annual fixed manufacturing costs $47 per unit $78,000