Ch $19$: End$-$of$-$Chapter Questions for Practice

Question $3$ of $7$

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Sunland Company reports the following operating results for the month of April.

$\backslash$table$[[\backslash$table$[[$SUNLANDCOMPANY$],[$CVP Income Statement$],[$For the Month Ended April $30,2025]]],[,$Total,Per Unit,Percent of Sales,$],[$Sales $(16,920$ units$),$$$423,000,$$$25,100,\%],[$Variable costs,$253,800,15,60,],[$Contribution margin,$169,200,$$$10,40,\%],[$Fixed expenses,$141,000,,,],[$Net income,$$28,200,,,]]$

Management is considering the following course of action to increase net income: Reduce the unit 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 $20\%.$

Using the contribution margin technique, compute the break$-$even point in sales units and sales dollars and margin of safety in dollars: $($Round intermediate calculations to $4$ decimal places e$.$g$.0\mathrm{.}2522$ and final answer to $0$ decimal places, e$.$g$.2,510.)$

$($a$)$ Assuming no changes to unit selling price or costs.

Break$-$even point units

Break$-$even point $

Margin of safety $

$($b$1)$ Assuming changes to unit selling price and volume as described above.

Break$-$even point

units

Break$-$even point $

Margin of safety $

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