Determining sales volume. A company’s contribution margin is 48 percent. A proposal has been made to install certain equipment that would result in an increase of $50,000 per year in fixed costs, but would increase the contribution margin (through a decrease in variable costs) to 54 percent. Existing fixed costs are $260,000 per year. What increase in sales volume would be necessary in order to justify purchasing the equipment?The Harris Company has the following standard costs per unit for its one product:

Use the same information as given above for the Harris Company except that in 19X1, 10,800 units were produced and 10,000 units were sold.

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Materials Labor Manufacturing Overhead Variable Fixed $4 8 $10 Total $26 The fixed cost of $8 per unit is based on producing 10,000 units and fixed overhead of $80,000. The sales price is $40 per unit. Selling and administrative expenses are as follows: variable, $2 per unit; fixed, $50,000 per year. During 19X1, 10,000 units were produced and sold.