Compute break$-$even units using the following formula:

Break$-$Even Units $=$ Total Fixed Costs $/($ Unit Selling Price $$ Unit Variable Cost $)$

For this assignment suppose that a firm has an existing product with a combined advertising and promotion budget of $$23,000,000$ and with projected sales of $115,000,000$ units. They are launching a new product with a budget of $$18,000,000$ and estimated sales of $10,000,000$ units in the first year. The sales force expense of $$8,000,000$ has been allocated equally between products; $90\%$ of the plant overhead has been allocated to the existing product, and $10\%,$ to the new product. Additional values for each product are shown in the table below.

$$Existing ProductNew ProductMSRP$$6\mathrm{.}35$$$5\mathrm{.}19$Volume Discount$36\%37\%$Unit Cost$$1\mathrm{.}30$$$1\mathrm{.}02$Promotional Allowance$15\%19\%$Advertising & Promotion$$23,000,000$$$18,000,000$Allocated Fixed Costs$$67,000,000$$$11,000,000$Projected Unit Sales$115,000,00010,000,000$

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Question $4$

Production anticipates it will need to increase capacity to $140$ million units, adding $$9,000,000$ to annual fixed costs. If the product allocation of the plant cost is also changed to $80\%/20\%,$ what is the impact on break$-$even units?

$$Existing Product New Product Total

Fixed Cost$$$$$$

Price to Channel$$$$$$

Unit Variable Cost$$$$$$

Break$-$Even Units$$