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XYZ Company's single product has a selling price of $25 per unit. Last year the company reported profit of $150,000 and variable expenses totaling $720,000.
XYZ Company's single product has a selling price of $25 per unit. Last year the company reported profit of $150,000 and variable expenses totaling $720,000. The product has a 40% contribution margin ratio. Because of competition XYZ Company will be forced in the current year to reduce its selling price by $2 per unit. How many units must be sold in the current year to eam the same profit as was earned last year? Select one: O a. 72,000 ob. 33,000 O c. 48.000 O d. 60,000 O e. 87,000 All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases? Select one: a. None of the given answers. o b. Unit contribution margin increases and contribution margin ratio decreases. O c. Both unit contribution margin and contribution margin ratio are unchanged. d. Unit contribution margin decreases while contribution margin ratio increases. e. Both unit contribution margin and contribution margin ratio decrease
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