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Question 4 of 4 -13-= View Policies Current Attemptin Progress Cullumber Manufacturing Ltd....

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Accounting

Question 4 of 4
-13-=
View Policies
Current Attemptin Progress
Cullumber Manufacturing Ltd. has provided you with the following CVP income statement:
\table[[Sales (5,500 units),$1,100,000,$200,per unit],[Variable costs,660,000,120,perunit],[Contribution margin,440,000,$80,per unit],[Fixed costs,380,000,,],[Operating income,$60,000,,]]
Management is considering the following course of action to increase operating income: reduce the selling price by 20%, with no: changes to unit variable costs or fixed costs. Management feels that this change will increase unit sales by 30%.
Calculate the break-even point in units and sales doliars with no change in sales. (Round contribution maryin natio to 5 decimal places, eg 15.22456% Round units to 0 decimal places, eg.5.275 and dollar amount to 2 decimal places, eg 15.25 J
\table[[,In units,In dollars],[Break-even point,,]]
Calculate the break-even point in units and sales dollars with the proposed change in sales price, (Round units to O decimal ploces, eg.5,275 and dollor amount to 2 decimal places, eg.15.25.
\table[[,In units,In dollars],[Break-even point,$,]]
Should management go forward with the reduction in sales price?
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