BIDA Corporation's sales slumped badly in 2021. For the first time in its history, it operated a loss. The company's income statement showed the following results: Net sales were $1.8 million on 60,000 units, cost of goods sold was $1,350,000 ($930,000 variable and $420,000 fixed), selling expenses were $480,000 ($125,000 variable and $355,000 fixed), and administrative expenses were $180,000 ($115,000 variable and $65,000 fixed). 1 Top Managers have asked you to do a CVP analysis so that they can make plans. 2 3 Instructions: c) The company is considering to increase the unit selling price by 25% with no change in costs, expenses or sales volume. Calculate the current selling price and the new selling price. Prepare a CVP Income Statement with the new selling price. Calculate (1) per unit contribution margin (2) contribution margin ratio (3) break-even point in units and (4) break-even point in sales dollars for this new situation. 36 37 (c) 38 Current Selling Price 39 New Selling Price 40 41 42 43 Units sold 44 Sales 45 Variable Costs 46 Cost of Goods Sold 47 Selling expenses 48 Administrative expenses Total variable costs 49 50 Contribution margin 51 Fixed Costs 52 Cost of Goods Sold 53 Selling expenses 54 Administrative expenses 55 Total fixed costs 56 Operating income/loss 57 58 59 Per unit contribution margin 60 Contribution margin ratio 61 Break-even in units With New Selling Price $30 $37.50 $18 0.48 46,667 units 62 Break-even in sales dollars $1,750,000 63 64