KMA Company reports the following operating results for the month of June 2020.

Total per unit

Sales (5000 units) $400,000 $ 80

Variable costs (300,000) 60

Contribution margin 100,000 20

Fixed expenses (80,000)

Net income 20,000

To increase net income, management is considering reducing the selling price by 10%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 25%. Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars

(a) assuming no changes to sales price or costs, and

(b) assuming changes to sales price and volume as described above.

(c) Comment on your findings.