Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY
CVP Income Statement
For the Month Ended April 30, 2020

Total

Per Unit

Sales (9,000 units) $450,000 $50
Variable costs 225,000 25.00
Contribution margin 225,000 $25.00
Fixed expenses 184,950
Net income $40,050

Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 20%.

Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places e. g. 0.2522 and final answer to 0 decimal places, e. g. 2,510.)

(a) Assuming no changes to selling price or costs.

Break-even point
Enter a number of units

units
Break-even point
$Enter a dollar amount

Margin of safety
$Enter a dollar amount

(b1) Assuming changes to sales price and volume as described above.

Break-even point
Enter a number of units

units
Break-even point
$Enter a dollar amount

Margin of safety
$Enter a dollar amount