Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost data are as follows

Required information [The following information applies to the questions displayed below.] Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost data are as follows: $ 25.00 $ 10.50 5.00 3.00 1.30 Selling price per unit (package of two CDs) Variable costs per unit: Direct material Direct labor Manufacturing overhead Selling expenses Total variable costs per unit Annual fixed costs: Manufacturing overhead Selling and administrative Total fixed costs Forecasted annual sales volume (120,000 units) $ 19.80 $ 192,000 276,000 $ 468,000 $3,000,000 In the following requirements, ignore income taxes. Required: 1. What is Serendipity Sound's break-even point in units? (Do not round intermediate calculations.) Break-even point units 2. What is the company's break-even point in sales dollars? (Do not round your intermediate calculations.) Break-even point 3. How many units would Serendipity Sound have to sell in order to earn $260,000? (Do not round intermediate calculations.) Number of sales units 4. What is the firm's margin of safety? Margin of safety 5. Management estimates that direct-labor costs will increase by 8 percent next year. How many units will the company have to sell next year to reach its break-even point? (Do not round intermediate calculations.) Break-even point units 6. If the company's direct-labor costs do increase by 8 percent, what selling price per unit of product must it charge to maintain the same contribution-margin ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Selling price