3-18 Effect on Profits of Change in Price (SIA) The Canadian Zinc Diecasting Company is one of several suppliers of part X to an automobile manufacturing firm. Orders are distributed to the various diecasting companies on a fairly even basis; however, the sales manager of Canadian Zinc believes that with a reduction in price he could secure another 30 percent increase in units sold. The general manager has asked you to analyze the sales manager's proposal and submit your recommendation. The following data are available: Unit price Unit sales volume Variable cost (total) Fixed cost Profit PRESENT PROPOSED $2.50 $2.00 200,000 units Plus 30% $350,000 $120,000 Same unit variable cost $120,000 $ 30,000 ? 1. Net profit or loss based on the sales manager's proposal 2. Unit sales required under the proposed price to make the original $30,000 profit