North American Manufacturing Inc. specialises in manufacturing valves for industrial application. The current production budget is to manufacture $150,000$ units per year.

The following information is available:

Direct Material $$30$ per unit

Direct Labour $$75$ per unit

Manufacturing overhead

~ Variable $$25$ per unit

~ Fixed $$151,000$ per year

Selling and administrative expenses

~ Variable commissions $$15$ per unit

~ Fixed $$156,000$ per year

a$.$ The company has used a cost$-$plus pricing system, marking its goods up at $25\%$ of total product cost. Compute the sales price per unit to achieve this profit margin. Use absorption$-$costing method.

b$.$ A recent survey has shown that the going market price for an identical product of comparable quality is $$160.$ At this price, the company expects to sell $175,000$ units per year. Determine whether the company would still be able to achieve the same operating profit at this price as before? Use contribution margin costing method.

Based on your analysis for North American Manufacturing, determine the GROSS PROFIT for $150,000$ units sold based on the absorption$-$costing method. $($Round your answer to ZERO decimals; do not include $ sign in your answer.$)$

Based on your analysis for North American Manufacturing, determine the GROSS PROFIT MARGIN based on the absorption$-$costing method. $($Round your answer to ZERO decimals; do not include $\%$ sign in your answer.$)$

Based on your analysis for North American Manufacturing, determine the TOTAL PRODUCT COST for$150,000$ sold based on the absorption$-$costing method. $($Round your answer to ZERO decimals; do not include $ sign in your answer.$)$

Based on your analysis for North American Manufacturing, determine the CONTRIBUTION MARGIN RATIO $($in $\%)$ for $175,000$ units sold based on the contribution margin$-$costing method. $($Round your answer to ZERO decimals; do not include $\%$ sign in your answer.$)$

Based on your analysis for North American Manufacturing, determine the OPERTING INCOME $($in $$)$ for $175,000$ units sold based on the contribution margin$-$costing method. $($Round your answer to ZERO decimals; do not include $ sign in your answer.$)$

Based on your analysis for North American Manufacturing, determine the CONTRIBUTION MARGIN $($in $$)$ for $175,000$ units sold based on the contribution margin$-$costing method. $($Round your answer to ZERO decimals; do not include $ sign in your answer.$)$

Based on your analysis for the target selling price of $$160$ and a budgeted volume of $175,000$ units, determine the total TARGET COST for the company to achieve the same OPERATING INCOME based on your initial analysis for $150,000$ units. $($Round your answer ot ZERO decimals; do not include $ sign in your answer$).$

Based on your analysis for the target selling price of $$160$ and a budgeted volume of $175,000$ units, will the company be able to achieve the same OPERATING INCOME based on the initial analysis for $150,000$ units.

Cannot determine the answer

YES

Will exceed initial operating income

NO