Hello,

I need an answer for the following excercise.

Thanks in advance

878 An Activity-Based Approach to CVP Analysis 882 Financial Planning Models 884 Summary 885 References 886 Self-study 888 Appendix 891 Key Terms 892 Review Questions P18.32 CVP relationships; indifference point: manufacturer LO 18.5 [ Brighton Electronics Lid produces a single product called The Gismo. To produce this product, Brighton purchases a key component from Supplier A. Supplier A has two versions of this component and 3 Exercises both are suitable for insertion into The Gismo. However, the two alternative components, Model 1 and Model 2, attract different costs for Brighton. Data relevant to the two components are as follows: . Model 1: variable costs, $16.00 per unit; annual fixed costs, $3 942 400. . Model 2: variable costs, $12.80 per unit; annual fixed costs, $4 454 400. Brighton's selling price for The Gismo is $64 per unit, which is subject to a 5 per cent sales commission. (Ignore income taxes.) Required: 1. How many units of The Gismo must Brighton sell to break even if Model 1 is selected? 2. Which of the two models would be more profitable if sales and production of The Gismo were 184 000 units per year? 3. Assume Model 2 requires the purchase of additional equipment that is not reflected in the above data. The equipment will cost $1 800 000 and will be depreciated over a five-year life by the straight- line method. How many units must the company sell to earn a profit of $3 825 600 if Model 2 is selected? 4. Ignoring the information presented in requirement 3, at what volume will Brighton's management be indifferent as to whether Model 1 or Model 2 is purchased-that is, at what level of production will the annual total cost of each alternative be equal