Cost Behavior and cost-Volume-Profit Analysis for Many Glacier Hotel Located on Swiftcurrent Lake in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. In an effort to supplement its lodging revenue, the hotel decided in 2003 to begin manufacturing and selling small wooden canoes decorated with symbols hand painted by Native Americans living near the park. Due to the great success of the canoes, the hotel began manufacturing and selling paddles as well in 2006. Many hotel guests purchase a canoe and paddles for use in self-guided tours of Swiftcurrent Lake. Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different laborers. Each canoe sells for $500, and each paddle sells for $50. A 2006 fire destroyed the hotel's accounting records. However, a new system put into place before the 2007 season provides the following aggregated data for the hotel's canoe and paddle manufacturing and marketing activities. Manufacturing Data: Number of Total Canoe Number of Total Paddle Canoes Manufacturing Paddles Manufacturing Manufactured Costs Year Manufactured Costs 250 $106,000 2012 900 $38,500 2011 275 115,000 1,200 49,000 2010 240 108,000 1,000 42,000 2009 122,000 1,100 45,500 130,000 1,400 56,000 140,000 1,700 66,500 Year 2012 2011 2010 2009 2008 2007 310 350 400 2008 2007 Marketing Data: Number of Year Canoes Sold 2012 250 2011 275 2010 240 2009 310 2008 2007 400 Total Canoe Marketing Costs $45,000 47,500 44,000 51,000 55,000 60,000 Year 2012 2011 2010 2009 2008 2007 Number of Paddles Sold 900 1,200 1,000 1,100 1,400 1,700 Total Paddle Marketing Costs $7,500 9,000 8,000 8,500 10,000 11,500 350 Sensitivity Cost-Volume-Profit Analysis and Production Versus Period Expenses, Multiple-Product Setting If both the variable and fixed production expenses (refer to your answer to Requirement 1) associated with the canoe product line increased by 5% (beyond the estimate from the high-low analysis), how many canoes and paddles would need to be sold in order to earn a target income of $96,000? Assume the same sales mix and additional fixed costs as in Requirement 3