Exercise $13$A$-5($Static$)$ Customer Latitude and Optimal Pricing $[$LO$13-9]$

Northport Company manufactures numerous products, one of which is called Sea Breeze Skin Cleanser. The company provided the following data regarding this product:

Unit sales $($a$)120,000$Selling price per unit$ $20\mathrm{.}00$Variable cost per unit$13\mathrm{.}00$Contribution margin per unit $($b$)$$ $7\mathrm{.}00$Total contribution margin $($a$)($b$)$$ $840,000$Traceable fixed expenses$800,000$Net operating income$ $40,000$

Management is considering increasing the price of Sea Breeze by $20\%,$ from $$20\mathrm{.}00$ to $$24\mathrm{.}00.$ The company$$s marketing managers estimate this price hike could decrease unit sales by as much as $30\%,$ from $120,000$ units to $84,000$ units.

Required:

In all of the below requirements, assume the traceable fixed expenses are not affected by the pricing decision.

Assuming the marketing managers$$ estimate is accurate, what profit will Sea Breeze Skin Cleanser earn at a price of $$24\mathrm{.}00?$

How many units would Northport need to sell at a price of $$24\mathrm{.}00$ to earn the exact same profit it currently earns at a price of $$20\mathrm{.}00?$

Note: Round your answer to the nearest whole number.

If Northport raises the price of Sea Breeze Skin Cleanser to $$24\mathrm{.}00,$ what percentage decrease in unit sales could be absorbed while still providing the same profit currently being earned at a price of $$20\mathrm{.}00?$