Carumba Inc.'s 2015 budget includes the following items:

Sales.................................80,000 units

Production...........................80,000 units

Direct materials used..................$600,000

Direct labour.............................400,000

Variable overhead.......................720,000

Fixed overhead..........................400,000

Variable selling costs...................260,000

Fixed selling costs.......................250,000

Administrative costs (all fixed).......150,000

The company's tax rate is 40%.

Required

1. At what price would the company break even?

2. If the company were to sell only 60,000 units, what price would produce a before-tax profit of 20% of sales?

3. Majestix Inc. has offered to supply Carumba with 80,000 units at a price of $28/unit. Should Carumba accept the offer? Explain.

4. What price would produce an after-tax profit of $350,000?