The sale price of the unique product is $30, contribution margin ratio 70% and the...
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Accounting
The sale price of the unique product is $30, contribution margin ratio 70% and the expectation for the following period are to get $422.300 profit with a sale 28.700 pcs which is the 70% of the capacity of the factory. Realized new market researches for profit planning and obtained the following results:
a)10% decrease in the unit sale price will cause a 15% increase in the sales quantity
b)10% increase in the unit sale price will cause a 15% decrease in the sales quantity,
c) 5% decrease in the unit sale price will cause a 10% increase in the sales quantity. As a manager of the business make your decision, is there a need to make a change in the sale price, if Yes choose the most appropriate option.
d) Calculate the quantity to sell to reach the BEP in quantity and amount.
e) Calculate the quantity to sell to increase the profit 50% if possible.
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