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Sales revenue.... Variable expenses... Contribution margin Fixed expenses Net operating income Product K Per Amount Unit $120,000 $1.20 60,000 0.60 $ 60,000 $0.60 Product L
Sales revenue.... Variable expenses... Contribution margin Fixed expenses Net operating income Product K Per Amount Unit $120,000 $1.20 60,000 0.60 $ 60,000 $0.60 Product L Per Amount Unit $80,000 $0.80 60,000 0.60 $20,000 $0.20 Combined Amount $200,000 120,000 80,000 50,000 $ 30,000 Required: a. Find the break-even point in terms of dollars. b. Find the margin of safety in terms of dollars. c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. Would you advise adopting this plan? d. Refer to (c) above. Under the new plan, find the break-even point in terms of dollars. e. Under the new plan in (c) above, find the margin of safety in terms of dollars
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