Question 6

Cost-Volume-Profit Analysis: LMN Co. produces widgets. Below are the costs and revenue details:

• Selling Price per Widget: $50
• Variable Cost per Widget: $30
• Fixed Costs: $100,000

Requirements:

1. Calculate the Contribution Margin per Widget.
2. Determine the Break-Even Point in units.
3. Compute the Break-Even Point in dollars.
4. Analyze the impact on the Break-Even Point if the selling price is reduced by 10%.