Question
Senlac Hill Lawnscapes Ltd. (Senlac Hill or Company) produces and sells electric lawn trimmers for $120 each. The variable costs of each mower total $80
Senlac Hill Lawnscapes Ltd. ("Senlac Hill" or "Company") produces and sells electric lawn trimmers for $120 each. The variable costs of each mower total $80 while total monthly fixed costs are $6,000. Current monthly sales are $48,000. The Company is considering a proposal that will decrease the selling price by 10%, increase monthly fixed costs by 50%, and increase unit sales to 450 units per month. Required: Compute the Senlac Hill's current break-even point in units and dollars. What is Senlac Hill's current margin of safety in units, dollars, and percentage? Compute Senlac Hill's margin of safety in units assuming the proposal is accepted. Compute the increase or decrease in profit assuming the proposal is accepted.
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