Northport Company manufactures numerous products, one of which is called Sea Breeze Skin Cleanser. The company has provided the following data regarding this product:

Unit sales (a)		120,000
Selling price per unit	$	20.00
Variable cost per unit		13.00
Contribution margin per unit (b)	$	7.00
Total contribution margin (a) (b)	$	840,000
Traceable fixed expenses		800,000
Net operating income	$	40,000

Management is considering increasing the price of Sea Breeze by 20%, from $20.00 to $24.00. The companys marketing managers estimate that this price hike could decrease unit sales by as much as 30%, from 120,000 units to 84,000 units.

Required:

In all of the below requirements, assume that the traceable fixed expenses are not affected by the pricing decision.

1. Assuming the marketing managers estimate is accurate, what profit will Sea Breeze Skin Cleanser earn at a price of $24.00?

2. How many units would Northport need to sell at a price of $24.00 to earn the exact same profit that it currently earns at a price of $20.00? (Round your answer to the nearest whole number.)

3. If Northport raises the price of Sea Breeze Skin Cleanser to $24.00, what percentage decrease in unit sales could be absorbed while still providing the same profit currently being earned at a price of $20.00? (Round your intermediate calculations to the nearest whole number. Round final answer to 1 decimal place.)