Product Pricing: Single Product Presented is the 2009 contribution income statement of Colgate Products. COLGATE PRODUCTS Contribution Income Statement For Year Ended December 31, 2009 Sales (12,000 units) $1,440,000 Less variable costs Cost of goods sold $480,000 Selling and administrative 132,000 (612,000) Contribution margin 828,000 Less fixed costs Manufacturing overhead 530,000 Selling and administrative 200,000 (730,000) Net income $98,000 During the coming year, Colgate expects an increase in variable manufacturing costs of $6 per unit and in fixed manufacturing costs of $48,000.

(a) If sales for 2010 remain at 12,000 units, what price should Colgate charge to obtain the same profit as last year?

b) Management believes that sales can be increased to 16,000 units if the selling price is lowered to $105. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate (c

After considering the expected increases in costs, what sales volume is needed to earn a profit of $98,000 with a unit selling price of $105?