Question
Stylo Company produces a single product.Their most recent data is shown below: Current Units sold 1 450 Sales price per unit $ 100 Variable cost
Stylo Company produces a single product.Their most recent data is shown below:
Current
Units sold 1 450
Sales price per unit $ 100
Variable cost per unit $ 50
Fixed costs $20 500
a. Calculate the current breakeven pointin units and dollars.
b. Calculate contribution margin income statement showing the company's profitability performance.
c. They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. The company can also source a cheaper raw material, decreasing the unit raw material cost by 8%. Demonstrate how these changes will benefit the company.
d. What is the margin of safety in dollars, assuming projected sales are based on the new retail price.
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