## Answers

New variable cost = ($645,825 / 5,450) + $3.30 = $121.80

New fixed cost = $672,000 + $40,400 = $712,400

Selling price per unit = $1,462,235 / 5,450 = $268.30

Contribution margin per unit = Selling price - New variable cost = $268.30 - $121.80 = $146.50

No of units to be sold = (New fixed cost + Target profit) / Contribution margin per unit

= ($712,400 + $34,000) / $146.50

= **5,095**

**Option A**

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