Woodinville Cement uses a process costing system. In 2017, the company produced and sold 100,000 bags of cement and incurred the following costs:

___________________________ Total __________ Per Equivalent Unit

Direct material .................... $ 25,000 ............................ $0.25

Direct labor ......................... 100,000 ................................ 1.00

Manufacturing overhead ....... 200,000 ............................... 2.00

Total .................................. $325,000 ............................. $3.25

The current selling price is $4 per unit, and the profit for 2017 was ($4 × 100,000) − $325,000 = $75,000. Sales projections for 2017 at the current price look flat, but the sales manager believes that if the sales price is reduced to $3.75, sales volume would increase by 12,000 units. Assume that direct material and direct labor are variable costs and that manufacturing costs are primarily fixed. Should Woodinville Cement lower the price?