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Answer #1

Solution a:

Contribution margin per unit = $390 - $320 = $70 per unit

Break even sales units = Fixed Costs / Contribution margin per unit = $1428000 / 70 = 20,400 units

Solution b:

New Contribution margin per unit = $440 - $320 = $120 per unit

Break even sales units = Fixed Costs / Contribution margin per unit = $1428000 / 120 = 11,900 units

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