Kip mar Company J produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes.

Sales price	$40.00
Variable cost of goods sold	12.00
Variable selling expenses	10.60
Variable administrative expenses	3.00
Annual fixed expenses	Â
Overhead	$7,800,000
Selling expenses	1,550,000
Administrative expenses	3,250,000

Kip mar can produce 1.5 million cases a year. The projected net income for the coming year is expected to be $1.8 million. Kip mar is subject to a 40% income tax rate. During the planning sessions, Kip mar"s managers have been reviewing costs and expenses. They estimate that the company"s variable cost of goods sold will increase 15% in the coming year and that fixed administrative expenses will increase by $150,000. All other costs and expenses are expected to remain the same.

Required

1. What amount of sales revenue will Kip mar need to achieve in the coming year to earn the projected net income of $1.8 million?
2. What price would Kipmar need to charge for the briefcase in the coming year to maintain the current year"s contribution margin ratio?