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CVP analysis-what-if questions; break even. Penta Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9
CVP analysis-what-if questions; break even. Penta Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $27,000 per month. Required: (Uniess otherwise stated, consider each requirement separately.) Calculate the break-even point expressed in terms of total sales dollars and sales volume. b. Calculate the monthly operating income (or loss) at a sales volume of 5,400 units per month. Calculate monthly operating income (or loss) if a $2 per unit reduction in selling price results in a volume increase to 8,400 units per month. C. Caleulate volume t80,o00 lonits) needed to produce Calculate monthly operating income (or loss) that would result from a $1 per unit price increase and a $6,000 per month increase in advertising expenses both relative to the original data. Assume a sales volume of 5,400 units per month. Management is considering a change in the salesforce compensation plan. Currently, each of the firm's two salespersons is paid a salary of $2.500 per month. Calculate the monthly operating income (or loss) that would result from changing the compensation plan commission of $.80 per unit, assuming a sales volume of: 1. 5.400 units per month. to a salary of S400 per month, plus a 2. 6,000 units per month. Assuming that the sales volume of 6,000 units per month achieved in part f could also be achieved by increasing advertising by $1,000 per month instead of changing the salesforce compensation plan, which strategy would you recommend? Explain your
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