Camino, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2017, Camino sold 400,000 basketballs at an average selling price of $12 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any kind):

Inventory, January 1, 2017: ………………………                 0 basketballs

Inventory, December 31, 2017: ………………….     20,000 basketballs

Fixed manufacturing costs: ………………………       $380,000

Fixed administrative costs: ………………………        $660,000

Direct materials costs: …………………………..      $          3 per basketball

Direct labor costs: ……………………………….         $          4 per basketball

Required

1. Calculate the breakeven point (in basketballs sold) in 2017 under:

a. Variable costing

b. Absorption costing

2. Suppose direct materials costs were $4 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Camino must have sold in 2017 to attain a target operating income of $120,000 under:

a. Variable costing

b. Absorption costing