A Company reports the following contribution margin income statement for this year. Contribution Margin Income Statement...

 

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A Company reports the following contribution margin income statement for this year. Contribution Margin Income Statement For Year Ended December 31 Sales (10,200 units at $36 each) Variable costs (10,200 units at $29 each) Contribution margin. Fixed costs Income $ 367,200 295,800 71,400 45,500 $ 25,900 The company is considering lowering its selling price. If it lowers its selling price to $34 per unit, it expects to sell 12,100 units next year. Variable costs per unit and fixed costs in total will not change. 1. Compute contribution margin per unit assuming the company lowers its selling price. 2. Compute break-even point in units assuming the company lowers its selling price. 3. Compute the income for next year assuming the company lowers its selling price. A Company reports the following contribution margin income statement for this year. Contribution Margin Income Statement For Year Ended December 31 Sales (10,200 units at $36 each) Variable costs (10,200 units at $29 each) Contribution margin. Fixed costs Income $ 367,200 295,800 71,400 45,500 $ 25,900 The company is considering lowering its selling price. If it lowers its selling price to $34 per unit, it expects to sell 12,100 units next year. Variable costs per unit and fixed costs in total will not change. 1. Compute contribution margin per unit assuming the company lowers its selling price. 2. Compute break-even point in units assuming the company lowers its selling price. 3. Compute the income for next year assuming the company lowers its selling price.

Answer rating: 100% (QA)

1 Contribution Margin per Unit with Lowered Selling Price Original selling price per unit 36 Origina... View the full answer