What is the break-even level?

The problem states that fixed costs are \0.40$ per unit at the planned production level of 200,000 units. This means the total fixed costs are constant, regardless of the actual production volume, and are calculated based on this planned level.

$$\text{Total Fixed Costs} = \text{Fixed Cost per Unit (at planned level)} \times \text{Planned Production}$$

$\text{Total Fixed Costs} = \$0.40 \text{ per unit} \times 200,000 \text{ units}$ $\text{Total Fixed Costs} = \$80,000$

The contribution margin per unit is the selling price per unit minus the variable cost per unit.

$$\text{Contribution Margin per Unit} = \text{Selling Price per Unit} - \text{Variable Cost per Unit}$$

$\text{Contribution Margin per Unit} = \$2.00 - \$1.20$ $\text{Contribution Margin per Unit} = \$0.80 \text{ per unit}$

The break-even level is the total fixed costs divided by the contribution margin per unit.

$$\text{Break-even Level (units)} = \frac{\text{Total Fixed Costs}}{\text{Contribution Margin per Unit}}$$

$\text{Break-even Level (units)} = \frac{\$80,000}{\$0.80 \text{ per unit}}$

$$\text{Break-even Level (units)} = 100,000 \text{ units}$$

The break-even level is 100,000 units, which corresponds to option C.

The final answer is $\text{C } 100,000 \text{ units}$.