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4. Changes in costs (30 points) Prego's company has the following contribution margin income statement: S38 per unit selling price = S24 per unit variable
4. Changes in costs (30 points) Prego's company has the following contribution margin income statement: S38 per unit selling price = S24 per unit variable cost = Sales = 10,000 units $380,000 total sales Variable costs - 10.000 units * $240.000 total variable costs Contribution margin = 10,000 units. $140,000 total cont margin S14 per unit contribution = Less: Fixed costs S 75.000 + OPERATING PROFIT $ 65,000 Answer the following independent "what if" questions. A. What is the Prego's break even point in units and dollars? B. What is the company's operating profit if the variable costs increase by 10% and all other variables remain the same? C. How many units must the company sell to keep their $65,000 operating profit if fixed costs increase to $90,000 and all other variables remain the same? D. What would be the company's operating profit if Prego reduces the selling price by 10% causing a 15% increase in the volume of sales and all other variables remain the same
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