Solution-Calculate the break-even point in units and sales

Calculate the break-even point in units and sales dollars

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Reference no: EM133081427

Question - Carla Vista Manufacturing Ltd. has provided you with the following CVP income statement:

Sales (5,200 units)	$1,040,000	$200 per unit
Variable costs	686,400	132 per unit
Contribution margin	353,600	$68 per unit
Fixed costs	290,360
Operating income	$63,240

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%.

Required -

Calculate the break-even point in units and sales dollars with no change in sales.

Calculate the break-even point in units and sales dollars with the proposed change in sales price.

Should management go forward with the reduction in sales price?

Reference no: EM133081427

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Calculate the break-even point in units and sales dollars

Reference no: EM133081427

Reference no: EM133081427

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