A certain company has a patent that will make it the only distributor of the Y product. In its first year, the capacity of its plant will be 9000 units, an amount that can be sold. Its costs are:

Direct labor: $ 1.50 per unit

Raw material: $ 0.50 per unit

Other variable costs: $ 1.00 per unit Fixed costs $ 24000

a) If the company wants to obtain a profit of $ 21000 in the first year. What should your selling price be? What is the contribution margin?

b) At the end of the first year, they want to increase their volume. A $ 10,000 increase in annual fixed costs will increase capacity by 50,000 units. Now they want a profit of $ 76,000 and to achieve this goal they also invest 50,000 in advertising. No other cost changes in these new conditions. How many units will they have to sell to make this profit, if their new sale price will be $ 7.00 per unit?