Sandhill Company produces a single product. It sold 90,000 units last year with the following results:

Sales				$2,250,000
Variable costs		$900,000
Fixed costs		360,000		1,260,000
Operating income before taxes				990,000
Income taxes (45%)				445,500
Operating income				$544,500

In an attempt to improve its product, Sandhill is considering replacing a component part in its product that has a cost of $5 per unit with a new and better part costing $10 per unit during the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $108,000, with a useful life of six years and no salvage value. The company uses straight-line depreciation on all plant assets.

What was Sandhills break-even point in units last year?

Break-even point

enter the break-even point in units

units

How many units of product would Sandhill have had to sell in the past year to earn $297,000 in operating income after taxes?

Sales to be made

enter a number of units

units

If it holds the sales price constant and makes the suggested changes, how many units of product must the company sell in the coming year to break even?

Break-even

enter the break-even point in units

units

If it holds the sales price constant and makes the suggested changes, how many units of product will Sandhill have to sell to make the same operating income before taxes as last year?

Required sales

enter the required sales in units

units

If Sandhill wishes to maintain the same contribution margin ratio, what selling price per unit of product must it charge next year to cover the increased materials costs? (Round answer to 2 decimal places, e.g. 15.25.)

Selling price per unit

$enter the selling price per unit in dollars rounded to 2 decimal places