Apex Manufacturing Corp is considering a significant shift in the mix of products it manufactures. The costs associated with current and proposed production schedules are shown below by category:

Cost Per Month	Present	Proposed
Plant Depreciation	$52,000	$52,000
Equipment depreciation	28,000	30,000
Raw Material	276,000	284,000
Direct Labor	312,000	334,000
Manufacturing Overhead (excludes depreciation	801,000	818,000

The proposed production will require a one-time purchase of equipment costing $180,000. No change in selling or administrative cost from their present levels is expected.

Required:

1. What type of relevant cost analysis would be appropriate in this situation (special order, make lease buy, etc)? Why?

2. What role does depreciation and equipment purchase cost play in this decision?

3. What is the minimum amount that revenue would have to increase per month to justify the proposed production schedule? Ingore taxes and the time value of money.