Company B Skyfall produces electronic appliances. Variable costs per product reach $180. Fixed costs per year reach $2,500,000. Sales price is $485 and this year company plans to sell 8,500 products.

Calculate :

a) break even point in units

b) break even point in $

c) margin of safety in $

d) current profit (use the data above)

e) Due to the tough competition at the market company assumes decrease of its sales price to CZK 420 and expects to sell 10,000 products. What will be impact on the breakeven point in units ? Calculate it

Is the change in the BEP positive or negative ?

Is it a good idea to increase the price ? Explain your answers based on the analysis above, do not forget to include also the profit after the price change.