Patel Company sells two stuffed toy products: a panda and a zebra. The panda’s per-unit contribution margin is $4 and the zebra’s per-unit contribution margin is $7. Patel Company expects to sell 800,000 panda toys and 400,000 zebra toys. Total fixed costs at Patel Company are $4.5 million. 

Required 

(a) How many units of each product must Patel Company sell to break even? 

(b) How many units of each product must Patel Company sell to earn a target profit of $600,000? 

(c) The marketing manager at Patel Company is proposing a sales promotion that will increase sales of both products by 10%. What is the maximum amount that Patel Company should be willing to pay for this promotion?