Mark Hancock Incorporated manufactures a specialized surgical instrument called the HAN-20. The firm has grown rapidly in recent years because of the product's low price and high quality. However, sales have declined this year primarily due to increased competition and a decrease in the surgical procedures for which the HAN-20 is used. The firm is concerned about the decline in sales and has hired a consultant to analyze the firm's profitability. The consultant was provided the following information: Sales (units) Production Budgeted production and sales Beginning inventory Data per unit (all variable) Price Direct materials and labor Selling costs Fixed costs Manufacturing overhead Selling and administrative 2021 2022 6,600 6,200 6,640 5,720 7,400 6,800 800 840 $ 2,095 $1,995 1,200 125 1,200 125 $ 1,295,000 120,000 $ 1,190,000 120,000