Queensland Company reports the following operating results for the month of April.

Queensland Company CVP Income Statement

For the Month Ended April 30, 2014

	Total		Per Unit
Sales (9,000 units)	$450,000		$50
Variable costs	270,000		30
Contribution margin	180,000		$20
Fixed expenses	150,000
Net income	$ 30,000

Management is considering the following course of action to increase net income: Reduce the selling price by 4%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 20%.

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 selling price or costs, and

(b) Assuming changes to sales price and volume as described above. Comment on your findings