Andersen Company had the following data available:

Selling Price Per Unit: $20.00

Variable Cost Per Unit: $12.00 (all manufacturing)

Fixed Costs: $50,000 (all non-manufacturing)

Estimated Number of Units Sold: 10,000

Mr. Andersen is thinking about lowering the price to $17.50 per unit. He believes that the units sold would increase to 12,500.

Required

• Prepare income statements using the current information and assuming that he lowers the price.
• Calculate the break-even point in units sold.
• Calculate the units needed for a net income of $20,000.
• Should Andersen lower the price? Explain your answer using amounts from the income statements

	Current	Lower Price
Sales
Variable Costs
Contribution Margin
Fixed Costs
Net Income
Break-Even in Units
Units Needed For Net Income of $20,000

Analysis: ?