Pettigrew Company produces a product that has a variable cost of $13 per unit; the product sells for $28 per unit. The company’s annual fixed costs total $375,000; it had net income of $75,000 in the previous year. In an effort to increase the company’s market share, management is considering lowering the selling price to $25 per unit.
Required
If Pettigrew desires to maintain net income of $75,000, how many additional units must it sell to justify the price decline?