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Sales (5,000 units) Variable costs Iris Manufacturing Inc. has provided you with the following CVP income statement: $1,000,000 $200 per unit 620,000 124 per
Sales (5,000 units) Variable costs Iris Manufacturing Inc. has provided you with the following CVP income statement: $1,000,000 $200 per unit 620,000 124 per unit Contribution margin 380,000 $76 per unit Fixed costs 328,320 Operating income $51,680 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 units to O decimal places, e.g. 5,275 and dollar amount to 2 decimal places, eg. 15.25.) In units In dollars Break-even point $ Calculate the break-even point in units and sales dollars with the proposed change in sales price. (Round units to O decimal places, eg. 5,275 and dollar amount to 2 decimal places, eg. 15.25) Break-even point In units In dollars $ Should management go forward with the reduction in sales price?
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