Cottonwood Company reports the following operating results for the month of April.

COTTONWOOD COMPANY

CVP Income Statement

For the Month Ended April 30, 2020

Total Per Unit

Sales (8,300 units)

$332,000 $40

Variable costs

132,800 16

Contribution margin

199,200 $24

Fixed costs

158,400

Operating income

$40,800

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 is confident that this change will increase unit sales by 30%.

Using the contribution margin technique, calculate the break-even point in units and dollars and margin of safety in dollars.

Assume no changes to selling price or costs. (Round answers to 0 decimal places, e.g. 125.)

Break-even point ?????

units

Break-even point $?????

Margin of safety $??????

Assume changes to sales price and volume as described above. (Round intermediate calculations to 2 decimal places, e.g. 15.25 or 15.25% and final answers to 0 decimal places, e.g. 125.)

Break-even point

units ???

Break-even point $ ????

Margin of safety $. ????