Mathematics, 19.11.2020 09:20 payshencec21
Management is considering the following course of action to increase net income: Reduce the selling price by 4%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 20%.
Assuming no changes to selling price or costs.
Break-even point in units = 7,500 units
Break-even point in sales dollars = $375,000
The margin of safety in dollars = $75,000
Assuming changes to sales price and volume as described above.
Break-even point in units = 8,333 units
Break-even point in sales dollars = $400,000
The margin of safety in dollars = $118,400
(b2)
Comment on the proposed course of action for computations.
Answers: 1
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Management is considering the following course of action to increase net income: Reduce the selling...
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