Quality Corporation sells a single product, an adjustable sun visor, whose selling price is $20 per unit and whose variable expense is $6 per unit. The company's monthly fixed expense is $24,000.
Required
a. Calculate the company's break-even point in unit sales.
b. Calculate the company's break-even point in dollar sales.
c. The company is considering a strategy whereby they improve the quality of the product, increasing costs by $2/unit and expanding advertising, increasing marketing costs by $7,000. They project that if they were to take these two actions, they could generate 2,500 additional sales units. Should they adopt this strategy?