Test if students truly understand the topic(s) in each unit. Be able to apply the theories, techniques, or findings in each unit to solve real life problems. Instructions The Unit Exercises are designed to reflect the understanding of key concepts and techniques of POM and evaluate students’ analytical skills. These exercises are quantitative. Unit 6 Exercise 1. A manufacturer produces three types of humidifiers. The retail price of Humidifier Regular (HR) is $60 with variable costs of $20. Humidifier Advanced (HA) sells for $200 for its advanced features. This model’s variable costs are $80. Humidifier Simple (HS) is a simplified version and only sells for $25 with variable costs of $15. The manufacturer has machines and facilities worth $320,000 annually. The sales data show that 1000 units of HR, 2000 units of HA, and 10,000 units of HS was sold last year. Calculate the break-even point of the firm. The firm has some idle capacity at these volumes, and chooses to cut the selling price of HR from $60 to $45, believing that its sales volume will rise from 1000 units to 2500 units. What is the revised break-even point? 2. Leonard’s company purchases a window hardware from William’s Hardware Co and sells to the market. Leonard is also considering manufacturing the product internally. William’s Hardware Co. charges $4 per unit, with a minimum order of 3,000 units. If Leonard manufactures the product in-home, the process setup fee could be $15,000 and then $1.82 per unit for labor and materials. a) Draw a graph illustrating the crossover (or indifference) point. b) Determine the number of units where either choice has the same cost. Evaluation The Unit Exercises will be marked in its entirety out of 100. The following rubric indicates the criteria students are to adhere to, and their relative weights to the assignment overall. Activities/Competencies Demonstrated % of Final Grade Recommendations or proposed solutions /45 Critical thinking and development of arguments or reasoning process /45 Formatting (structure, grammar, spelling, etc.) /10 Total /100 Submission status