Presented is the current year contribution income statement of Grafton Products

GRAFTON PRODUCTS Contribution Income Statement For Year Ended December
Sales (15,000 units)		$ 2,625,000
Less variable costs
Cost of goods sold	$ 1,275,000
Selling and administrative	150,000	(1,425,000)
Contribution margin		1,200,000
Less fixed costs
Manufacturing overhead	685,000
Selling and administrative	330,000	(1,015,000)
Net income		$ 185,000

Next year, Grafton expects an increase in variable manufacturing costs of $10 per unit and in fixed manufacturing costs of $30,000. (a) If sales for the next year remain at 15,000 units, what price should Grafton charge to obtain the same profit as last year? Round to the nearest cent. $Answer

(b) Management believes that sales can be increased to 18,000 units if the selling price is lowered to $165.What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate. Answer

(c) After considering the expected increases in costs, what sales volume is needed to earn a pretax profit of $200,000 with a unit selling price of $165? Round to the nearest unit. Answer