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Scholes Systems supplies a particular type of office chalr to large retallers such as Target, Costco, and Office Max. Scholes is concerned about the possible

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Scholes Systems supplies a particular type of office chalr to large retallers such as Target, Costco, and Office Max. Scholes is concerned about the possible effects of inflation on its operations. Presently, the comparry sells 92000 units for $80 per untt. The varlable production costs are $45, and foxed costs amount to $1,520,000. Production engineers have advised management that they expect unit labor costs to rise by 15 percent and unit materlals costs to rise by 10 percent in the coming year. Of the $45 varlable costs. 60 percent are from labor and 30 percent are from materials. Varlable overhead 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 4 percent as a result of Increased taxes and other miscellaneous fixed charges. The company wshes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective. profits must increase by 6 percent during the year. Required: a. Compute the volume in units and the dollar sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented. b. Compute the volume of sales and the dollar sales level necessary to provide the 6 percent increase in profits, assuming that the maximum price increase is implemented. c. If the volume of sales were to remain at 92,000 units, What price change would be required to attain the 6 percent increase in profits? Calculate the new price. Complete this question by entering your answers in the tabs below. Compute the volume in units and the dollar sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented. (Do not round intermediate calculations. Round up your answer for "Volume in units" to the nearest whole number and round your answer for "Sales" to the nearest whole dollar amount.)

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