ais a vient de finir GELESCHI Galle-EXT File Home Insert Draw Design Layout Referenc Mailings Review View Help PROBLEM 20.6A Analyzing the Effects of Changes in Costs Precision Systems manufactures CD burners and currently sells 18,500 units annually to producers of laptop computers. Jay Wilson, president of the company, anticipates a 15 percent increase in the cost per unit labor on January 1 of next year. He expects all Wilson has asked you to assist him in other costs and expenses to rem developing the information he needs to folate a reasonable product strategy for next year. You are satisfied that volume is the primary factor affecting costs and expenses and have separated the semi-variable costs into their fixed and variable segments. Beginning and ending inventories remain at a level of 1,000 units. Current plant capacity is 20,000 units. The following are the current-year data assembled for your analysis. Sales price per unit Variable costs per unit Direct materials Direct labor Manufacturing overhead and selling and administrative expenses Contribution margin per unit (40%) Fixed costs Instructions $10 20 $100 30 60 a. What increase in the selling price is necessary to cover the 15 percent Increas labor cost and still maintain the current contribution margin ratio of 40 perc $40 $390,000 b. How many units must be sold to maintain the current operating income of $350,000 the sales price remains at $100 and the 15 percent wage increase goes into effect? (hip Page 5 of 6 Display Settings Focus * 100% 16:10 02/02/2021