Question:

Sunlands managers have determined that variable costs per unit will increase by $20\%$ beginning next month. To offset this increase in costs, they are considering a $12\%$ increase in the sales price, Market research indicates that the price increase will result in a $3\%$ decrease in the number of learning systems Sunlands sells. What will be Sunland expected operating income if the price increase is implemented? $($Round per unit calculations to $2$ decimal places e$.$g$.52\mathrm{.}75$ and final answer to $0$ decimal places, e$.$g$.5,275.)$

Sunland sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's

income statement from last month is as follows:

Given: Contribvution marign ratio: $60\%$

Variable cost ratio: $40\%$

Breakeven Sales: $$425,000$

Margin of Safety: $$250,000$