Cost-volume-profit relationship Larusso Corporation manufactures faucets. The variable costs of production are $7 per faucet. Fixed costs of production are $81,000. Larusso sells the faucets for a price of $25 per unit.

Required

a. How many faucets must Larusso make and sell to break even?

b. How many faucets must Larusso make and sell to earn a $27,000 profit?

c. The marketing manager believes that sales would increase dramatically if the price were reduced to $22 per unit. How many faucets must Larusso make and sell to earn a $27,000 profit, assuming the sales price is set at $22 per unit?