Ng Corporation produces and sells only one product; its selling price is $100 and its variable cost is $80 per unit. The companys monthly fixed expense is $20,000.

Required:

1. What is the break-even point in units and sales dollars? (5 marks)

2. What is the break-even point in units and sales dollars if Ng Corporation decreases its selling price from $100 to $95 per unit and decrease its variable cost by 10%? (5 marks)

Ng Corporation produces and sells only one product; its selling price is $100 and its variable cost is $80 per unit. The companys monthly fixed expense is $20,000.

Required:

1. What is the break-even point in units and sales dollars? (5 marks)

2. What is the break-even point in units and sales dollars if Ng Corporation decreases its selling price from $100 to $95 per unit and decrease its variable cost by 10%? (5 marks)

Q2. (25 marks) CVP Analysis

Ng Corporation produces and sells only one product; its selling price is $100 and its variable cost is $80 per unit. The companys monthly fixed expense is $20,000.

Required:

1. What is the break-even point in units and sales dollars? (5 marks)

2. What is the break-even point in units and sales dollars if Ng Corporation decreases its selling price from $100 to $95 per unit and decrease its variable cost by 10%? (5 marks)

3. How many units should be sold in order to earn a desired income of $3,000? (5 marks)

5. Calculate the number of units that need to be sold to earn an after-tax income of $6,000, assuming a tax rate of 25%. (5 marks)

6. Briefly explain cost-volume-profit analysis and its purpose to managers? (5 marks)