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

QUEENSLAND COMPANY CVP Income Statement For the Month Ended April 30, 2014 Total Per Unit Sales (9,000 units) $450,000 $50 Variable costs 270,000 30 Contribution margin 180,000 $20 Fixed expenses 150,000 Net income $ 30,000 Management is considering the following course of action to increase net income: Reduce the selling price by 4%, 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:

(a) Assuming no changes to selling price or costs, and

(b) Assuming changes to sales price and volume as described above.

Comment on your findings.

AppendixLO1