Steven Newman, Inc., estimates 2012 costs to be as follows:
Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6 per unit
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8 per unit
Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$5 per unit
Variable selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2 per unit
Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000
1. Assuming that Newman will sell 50,000 units, what sales price per unit will be needed to achieve a $75,000 profit?
2. Assuming that Newman decides to sell its product for $23 per unit, determine the break-even sales volume in dollars and units.
3. Assuming that Newman decides to sell its product for $23 per unit, determine the number of units it must sell to generate a $100,000 profit.