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Question - Sultan Corporation operated at its normal capacity during the current year, producing 71,000 units of its single product. Sales totalled 61,000 units at an average price of $25 per unit. Variable cost of goods sold amounted to $9 per unit, and sales commissions were paid out at $4 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $189,000 and fixed period costs, incurred uniformly, amounted to $29,000 per quarter.
Required -
1. Compute Sultan's break-even point in sales dollars for the current year.
2. If Sultan's fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase?
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