Scholes Systems supplies a particular type of office chair to large retailers such as Target, Costco, and office max. Scholes is concerned about the possible effects of infiation on its operations. Presently, the company sells 91,000 units for $75 per unit. The variable production costs are $40, and fixed costs amount to $1, 510,000. Production engineers have advised management that they expect unit labor costs to rise by 15 percent and unit materials costs to rise by 5 percent in the coming year. Of the $40 variable costs, 45 percent are from labor and 25 percent are from materials. Variable overthead costs are expected to increase by 20 percent. Sales prices cannot increase more than 10 percent. It is also expected that fixed costs will rise by 5 percent as a result of increased taxes and other miscellaneous fixed charges