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Bill Packman Industries (BPI) manufactures a single product. It sold 50 000 units in 2019 with the following results: Sales Variable Costs Fixed Costs $
Bill Packman Industries (BPI) manufactures a single product. It sold 50 000 units in 2019 with the following results: Sales Variable Costs Fixed Costs $ 1,100,000 750,000 280,000 Required: a) Calculate the contribution margin per unit for 2019. b) What was BPI's breakeven point in units and dollars for 2019? c) What was the margin of safety in units and dollars for 2019? d) How many units of the product would BPI have had to sell in the past year to earn a profit-before-tax of $140,000? BPI is considering making improvements to the product which would result in a component part that cost $3.00 per unit in 2019 costing $5.00 per unit in 2020. Annual fixed costs, however, would be reduce by $50,000. Required: e) If BPI holds the sales price constant and makes the above changes, how many units of product must be sold in 2020 to break even? f) Based on your findings should BPI go ahead with the changes
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