Cottonwood Company reports the following operating results for the month of April.
COTTONWOOD COMPANY
CVP Income Statement
For the Month Ended April 30, 2012

Management is considering the following course of action to increase operating income: Reduce the selling price by 10%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 30%?

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Sales (9,000 units) Variable costs Contribution margin Fixed expenses Operating income Total $450,000 247,500 202,500 150,000 S 52,500 Per Unit $50.00 27.50 $22.50