1. Integrated Financial. A company is considering a price reduction of 25 percent on its entire line of bicycles. Given the following information, calculate the sales volume (in dollars) needed to obtain a 5 percent profit (as a percent of sales). (Note: unit variable and fixed costs will remain constant)

Previous Year Financials

Sales volume                                              150,000 units

Sales                                                         $18,000,000

Contribution Margin                                    .40 (40%)

Fixed Costs                                                $5,580,000

Net Profits                                                 $   720,000

2. If a company wishes to obtain $100,000 profit on sales this coming year, what level of sales need they obtain given the following previous year expense/price information (which is expected to remain constant for the upcoming year):

Advertising                                              $1,000,000

Selling &Administrative Exp                    1,600,000

Plant and Equipment expense                2,000,000

Cost of goods sold                                        560,000

(Based on volume of 224,000 units)

Selling Price                                                       $20.00

3. Using the information in question 2 above, what would the company need in sale dollars to achieve the $100,000 profit level if they reduced price by 8 percent?