# Cambridge Manufacturing is evaluating the introduction of a new product that would have a unit selling price

## Question:

a. What sales volume (in units) is required to break even?

b. What volume is required to generate a net income of $100,000?

c. What would be the net income at the forecast sales volume?

d. At the forecast sales volume, what will be the change in the net income if fixed costs are:

(i) 5% higher than expected?

(ii) 10% lower than expected?

e. At the forecast sales volume, what will be the change in the net income if unit variable costs are:

(i) 10% higher than expected?

(ii) 5% lower than expected?

f. At the forecast sales volume, what will be the change in the net income if the unit selling price is:

(i) 5% higher?

(ii) 10% lower?

g. At the forecast sales volume, what will be the change in the net income if unit variable costs are 10% higher than expected and fixed costs are simultaneously 10% lower than expected?

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