The Buchanan Company has gathered the following information for a unit of its most popular product:
Direct materials $ 13.60
Direct labor 7.60 Overhead (40% variable)
11.60 Cost of manufacture 32.80 Desired markup 16.40
Target selling price $ 49.20 The above cost information is based on 4,000 units.
A distributor has offered to buy 3,600 units at a price of $37.60 per unit. The distributor claims this special order would not disturb regular sales at $49.20. Special packaging and other selling expenses would be an additional $2.10 per unit for the special order. How many units of regular sales could be lost before this contract is not profitable? (Round your final answer to the nearest whole unit.)
3,600 units.
1,812 units.
1,489 units.
4,000 units.