Sunland Company produces a single product. It sold 87,000 units last year with the following results:

Sales				$2,175,000
Variable costs		$870,000
Fixed costs		348,000		1,218,000
Operating income before taxes				957,000
Income taxes (45%)				430,650
Operating income				$526,350

In an attempt to improve its product, Sunland is considering replacing a component part in its product that has a cost of $5 per unit with a new and better part costing $10 per unit during the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $104,400, with a useful life of six years and no salvage value. The company uses straight-line depreciation on all plant assets.

What was Sunlands break-even point in units last year?

Break-even point

enter the break-even point in units

units

How many units of product would Sunland have had to sell in the past year to earn $287,100 in operating income after taxes?

Sales to be made

enter a number of units

units

If it holds the sales price constant and makes the suggested changes, how many units of product must the company sell in the coming year to break even?

Break-even

enter the break-even point in units

units

If it holds the sales price constant and makes the suggested changes, how many units of product will Sunland have to sell to make the same operating income before taxes as last year?

Required sales

enter the required sales in units

units

If Sunland wishes to maintain the same contribution margin ratio, what selling price per unit of product must it charge next year to cover the increased materials costs? (Round answer to 2 decimal places, e.g. 15.25.)

Selling price per unit

$enter the selling price per unit in dollars rounded to 2 decimal places