Carla Vista Manufacturing Ltd. has provided you with the following CVP income statement: Sales (5,200 units)...

Transcribed Image Text:

Carla Vista Manufacturing Ltd. has provided you with the following CVP income statement: Sales (5,200 units) $1,040,000 $200 per unit Variable costs 686,400 132 per unit Contribution margin 353,600 $68 per unit Fixed costs 290,360 Operating income $63,240 Management is considering the following course of action to increase operating income: reduce the selling price by 20%, with no changes to unit variable costs or fixed costs. Management feels that this change will increase unit sales by 30%. Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, e.g. 15.22456%. Round units to O decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.) Break-even point In units In dollars Carla Vista Manufacturing Ltd. has provided you with the following CVP income statement: Sales (5,200 units) $1,040,000 $200 per unit Variable costs 686,400 132 per unit Contribution margin 353,600 $68 per unit Fixed costs 290,360 Operating income $63,240 Management is considering the following course of action to increase operating income: reduce the selling price by 20%, with no changes to unit variable costs or fixed costs. Management feels that this change will increase unit sales by 30%. Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, e.g. 15.22456%. Round units to O decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.) Break-even point In units In dollars

Answer rating: 100% (QA)

To calculate the breakeven point in units and sales dollars with no change in sales we can u... View the full answer