Breakeven point, what-if analysis Premier Products, Inc., is considering replacing its existing machine with a new and faster machine that will produce a more reliable product and will turn around customer orders in a shorter period. This change is expected to increase the sales price and fixed costs but not the variable costs:

Required(a) Determine the breakeven point in units for the two machines.(b) Determine the sales level in units at which the use of the new machine will achieve a 10% target profit-to-sales ratio.(c) Determine the sales level in units at which profits will be the same for either the old or the new machine.(d) Which machine represents a lower risk of incurring a loss? Explain why.(e) Determine the sales level in units at which the profit-to-sales ratio will be equal with either machine.

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Estimated annual sales volume = 11,535,700 packets Selling price $35.00 Variable costs: Raw materials $16.00 Direct labor 7.00 Manufacturing support Selling expenses Total variable costs per 100 packets 4.00 1.60 $28.60 Annual fixed costs: Manufacturing support Selling and administrative Total fixed costs $192,000 276,000 $468,000