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

Number of canoes produced and sold		500		700		850
Total costs
Variable costs	$	82,500	$	115,500	$	140,250
Fixed costs	$	178,500	$	178,500	$	178,500
Total costs	$	261,000	$	294,000	$	318,750
Cost per unit
Variable cost per unit	$	165.00	$	165.00	$	165.00
Fixed cost per unit		357.00		255.00		210.00
Total cost per unit	$	522.00	$	420.00	$	375.00

Sandy Bank sells its canoes for $475 each.

Required:

1. Suppose that Sandy Bank raises its selling price to $600 per canoe. Calculate its new break-even point in units and in sales dollars.

2. If Sandy Bank sells 1,520 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $600.)

3. Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $120,000 profit.