Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost data are as follows: Selling price per unit (package of two CDs) $ 25.00 Variable costs per unit: Direct material $ 10.50 Direct labor 5.00 Manufacturing overhead 3.00 Selling expenses 1.30 Total variable costs per unit $ 19.80 Annual fixed costs: Manufacturing overhead. Selling and administrative Total fixed costs Forecasted annual sales volume (120,000 units) $ 192,000 276,000 $ 468,000 $3,000,000 In the following requirements, ignore income taxes. Problem 7-40 Part 5 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.)