Problem Set Page 9 of 13 Problem #3: Operating Leverage and Risk (24 points) The Weeknd Lighting is a small manufacturing company that is considering substituting fixed costs for variable costs by partially automating its operations. The company consistently generates demand of 38,000 units annually at a selling price of $36.50 per unit. The Weeknd Lighting made the following estimates about its a. Current Cost Structure Proposed Cost Structure Variable Costs per unit Total Fixed Costs $22.50 $385,000 $16.50 $600,000 Compute the breakeven point for the two cost structures. (4 points) Current Cost Structure Breakeven Point in units Breakeven Point in Sales $5 Supporting Calculations Required: Proposed Cost Structure