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

Number of canoes produced and sold		450		650		800
Total costs
Variable costs	$	72,000	$	104,000	$	128,000
Fixed costs	$	187,200	$	187,200	$	187,200
Total costs	$	259,200	$	291,200	$	315,200
Cost per unit
Variable cost per unit	$	160.00	$	160.00	$	160.00
Fixed cost per unit		416.00		288.00		234.00
Total cost per unit	$	576.00	$	448.00	$	394.00

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 1,510 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 $110,000 profit.