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	$	192,000
Selling and administrative		276,000
Total fixed costs	$	468,000
Forecasted annual sales volume (120,000 units)	$	3,000,000

In the following requirements, ignore income taxes.

Required: 1. What is Serendipity Sounds break-even point in units? (Do not round intermediate calculations.) 2. What is the companys break-even point in sales dollars? (Do not round your intermediate calculations.) 3. How many units would Serendipity Sound have to sell in order to earn $260,000? (Do not round intermediate calculations.) 4. What is the firms 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.) 6. If the companys 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.)