Question
Question 1 Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30,
Question 1 Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2017 Total Per Unit Sales (9,300 units) $418,500 $45 Variable costs 205,065 22.05 Contribution margin 213,435 $22.95 Fixed expenses 160,650 Net income $52,785 Management is considering the following course of action to increase net income: Reduce the selling price by 3%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places e.g. 0.2522 and final answer to 0 decimal places, e.g. 2,510.) (a) Assuming no changes to selling price or costs. Break-even point units Break-even point $ Margin of safety $ (b1) Assuming changes to sales price and volume as described above. Break-even point units Break-even point $ Margin of safety $
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