SheridanCompany produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes.

Sales price$34

Variable cost of goods sold10

Variable selling expenses9.0

Variable administrative expenses3

Annual fixed expenses

Overhead$7,176,000

Selling expenses1,518,000

Administrative expenses2,898,000

Sheridancan produce1.38millioncases a year. The projected net income for the coming year is expected to be $1.66million.Sheridanis subject to a40% income tax rate.

During the planning sessions,Sheridan's managers have been reviewing costs and expenses. They estimate that the company's variable cost of goods sold will increase15% in the coming year and that fixed administrative expenses will increase by $138,000. All other costs and expenses are expected to remain the same.

Contribution margin per unit?