4...j

Pharoah Manufacturing Ltd. has provided you with the following CVP income statement: Management is considering the following course of action to increase operating income: reduce the selling price by 20%, with no changes to unit variable costs or fixed costs. Management feels that this change will increase unit sales by 30%. Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, e.g. 15.22456\%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, eg. 15.25.) Calculate the break-even point in units and sales dollars with the proposed change in sales price. (Round units to 0 decimal places, eg. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.) Question Part Score Should management go forward with the reduction in sales price