Question
pharoach manufacturing ltd has provided you with the following cvp income statement Sales Sales (5,000 units) Variable costs Contribution margin Fixed costs Operating income $1,000,000
pharoach manufacturing ltd has provided you with the following cvp income statement Sales
Sales (5,000 units) Variable costs Contribution margin Fixed costs Operating income $1,000,000 670,000 330,000 274,560 $55,440 $200 134 per unit per unit $66 perunit
Management is considering the following course of action to increase operating income: reduce the selling price by 20%, with no changes to unit variable costs or fixed costs. Management feels that this change will increase unit sales by 30%.
Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, eg. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
breakeven points in units and $dollar..?
Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, eg. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
breakevenpoints in unit and $dollar..?
should management go forward with reduction in sales price yes or no ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started