Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2017
Total Per Unit
Sales (8,600 units) $455,800 $53
Variable costs 223,342 25.97
Contribution margin 232,458 $27.03
Fixed expenses 205,428
Net income $27,030
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 units
Break-even point $
Margin of safety $
(b1) Assuming changes to sales price and volume as described above.
Break-even point units
Break-even point $
Margin of safety $