Assuming no changes to selling price or costs

Assignment Help Financial Accounting

Reference no: EM131294949

Victoria Company reports the following operating results for the month of April.

VICTORIA COMPANY

CVP Income Statement

For the Month Ended April 30, 2017

Total Per Unit Sales (9,800 units) $519,400 $53 Variable costs 254,506 25.97 Contribution margin 264,894 $27.03 Fixed expenses 205,428 Net income $59,466 Management is considering the following course of action to increase net income: Reduce the selling price by 6%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 20%. Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places e.g. 0.2522 and final answer to 0 decimal places, e.g. 2,510.)

(a) Assuming no changes to selling price or costs. Break-even point units Break-even point $ Margin of safety $

(b) Assuming changes to sales price and volume as described above. Break-even point units Break-even point $ Margin of safety $

Reference no: EM131294949

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