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Exercise 3: Breakeven Calculations I The following data relate to the one product of the Cranston Company: Planned sales in units Selling price Variable cost

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Exercise 3: Breakeven Calculations I The following data relate to the one product of the Cranston Company: Planned sales in units Selling price Variable cost per unit Total fixed costs 20,000 S9 S60,000 a. If Cranston achieves its planned 20,000 unit sales, how much profit wil it make? b. Which of the following events would reduce planned profits the most? (i) A decrease in selling price of 10% (ii) An increase in variable costs of 10% per unit (iii) An increase in total fixed costs of 10% (iv) A decline in unit sales of 10% C. If the selling price declined by 10%, how many more units would have to be sold to achieve the planned profit

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