Handout Exercise on C-V-P Identifying CVP Relationships Accounting 315 The Hill Company manufactures CD player for automobiles. The company has an annual plant capacity of 50,000 units. Hill currently sells 40.000 units at a price of $105. The company has the following cost structure: Variable manufacturing costs per unit $45 Fixed manufacturing costs $800,000 Variable marketing and distribution costs per unit Fixed marketing and distribution costs $600,000 Required: (a) Determine the company's break-even point in units and sales dollars, and (b) Determine the company's current operating profit. $10 (C) The marketing department indicates that decreasing the selling price to $99 would increase sales to 50,000 units. This strategy would require the company to increase its fixed marketing and distribution costs. Hill would like to know what the maximum increase in fixed costs the company can withstand and still maintain its operating profit. (d) The manufacturing department proposes to change the manufacturing process to add new features to the CD player. These changes will increase fixed manufacturing costs by $100.000 and variable manufacturing costs by $2. Hill would like to increase the sales price for the CD player to cover these additional costs. Hill anticipates the sales demand to remain at 40,000 units. Determine the minimum sales price that Hill can charge to maintain its current operating income