Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows:

Number of canoes produced and sold		400		600		750
Total costs
Variable costs	$	54,000	$	81,000	$	101,250
Fixed costs	$	60,000	$	60,000	$	60,000
Total costs	$	114,000	$	141,000	$	161,250
Cost per unit
Variable cost per unit	$	135.00	$	135.00	$	135.00
Fixed cost per unit		150.00		100.00		80.00
Total cost per unit	$	285.00	$	235.00	$	215.00

Sandy Bank sells its canoes for $375 each.

Required:

1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars.

2. If Sandy Bank sells 690 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.)

3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit.