(1) The break-even point in units is 7,700 units and the break-even point in sales dollars is $847,000. (2) If the company's fixed costs increase by $125,000, the new break-even point in sales dollars is $1,082,500. Explanation: (1) The contribution margin per unit is calculated as the selling price per unit minus the variable cost per unit, which is $110 - $88 = $22. The break-even point in units is calculated as the fixed costs divided by the contribution margin per unit, which is $308,000 / $22 = 14,000 units. The break-even point in sales dollars is calculated as the break-even point in units times the selling price per unit, which is 14,000 units * $110/unit = $1,540,000. (2) If the company's fixed costs increase by $125,000, the new fixed costs are $308,000 + $125,000 = $433,000. The new break-even point in units is calculated as the new fixed costs divided by the contribution margin per unit, which is $433,000 / $22 = 19,682 units. The new break-even point in sales dollars is calculated as the new break-even point in units times the selling price per unit, which is 19,682 units * $110/unit = $2,165,020