Answer:
The company will need to sale 3,883 units to maintain its current operating income of 400,000
Explanation:
We will calculate the point at which the company mantains his current income in units at the new scenario:
![\frac{Fixed\:Cost + target \: income}{Contribution \:Margin} = Break\: Even\: Point_{units}](https://tex.z-dn.net/?f=%5Cfrac%7BFixed%5C%3ACost%20%2B%20target%20%5C%3A%20income%7D%7BContribution%20%5C%3AMargin%7D%20%3D%20Break%5C%3A%20Even%5C%3A%20Point_%7Bunits%7D)
<u>Where:</u>
![Sales \: Revenue - Variable \: Cost = Contribution \: Margin](https://tex.z-dn.net/?f=Sales%20%5C%3A%20Revenue%20-%20Variable%20%5C%3A%20Cost%20%3D%20Contribution%20%5C%3A%20Margin)
625 - 190 = 435 each units contributes this amount to afford the fixed cost and make a gain.
Current income: contribution x units sold - fixed cost
(590-190) x 4,000 - 1,200,000 = 400,000
(1,200,000 + 89,000 + 400,000) / 435 = 3,882.75862 = 3,883 units
The company will need to sale 3,883 units to maintain its current operating income of 400,000