Linden Company manufactures and sells a single product. Cost data for the product follow:

VARIABLE COSTS PER UNITDirect Materials$6.00Direct Labor12.00Variable Factory Overhead4.00Variable selling and administrative3.00Total variable costs per unit$25.00FIXED COSTS PER MONTHFixd Factory Overhead$ 240,000Fixed selling and administrative180,000Total Fixed Costs per month$ 420,000

The product sells for $40 per unit. During the monthof May the company produced 30,000 units and sold 26,000 of those units. During the month of June, the company produced 30,000 units and sold 34,000 units (all units from June plus the 4,000 units left over from May).

REQUIRED:Complete the following table:

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Compute the break-even point in units for May Compute the break-even point in sales dollars for May Would the break-even point he the same for May and June? Compute the company's margin of safety in dollars for May Compute the company's margin of safety as a percentage (to two decimal places) for May The manager believes that due to good economic conditions, if the selling price is reduced by 10%, unit sales will increase by 30% in July (from June). Should the manager proceed with this decision? Complete the table to show calculations JULY (with JUNE proposed chan-es Unit sales 34,000 Selling Price per unit (34.000) (40) m h 0 6-! Sales Total Variable costs Contribution Margin Total Fixed Costs Net Operating Income Should the manager proceed with the decision? Why? 2 v2 Using the proposed changes by the manager, compute the new break-even point in units Using the proposed chnages by the manager, compute the new break-even point in sales dollars