Diana Company, a sole proprietorship, sells only one product. The regular price is $160. Variable costs...

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Diana Company, a sole proprietorship, sells only one product. The regular price is $160. Variable costs are 55% of this selling price, and fixed costs are $8,400 a month. Management decides to decrease the selling price from $160 to $145 per unit. Assume that the cost of the product and the fixed operating expenses are not changed by this pricing decision. Required: Answer the following questions: (A) At the original selling price of $160 a unit, what is the contribution margin ratio? (B) At the original selling price of $160 a unit, what dollar volume of sales per month is required for Diana Company to break-even? (Round your answer to the nearest whole dollar.) (C) At the original selling price of $160 a unit, what dollar volume of sales per month is required for Diana Company to earn a monthly operating income of $6,500? (Round your answer to the nearest whole dollar.) (D) At the reduced selling price of $145 a unit, what is the contribution margin ratio? (E) At the reduced selling price of $145 a unit, what dollar volume of sales per month is required to break-even? (Round your intermediate percentage to one decimal place and final answer to the nearest whole dollar.) Diana Company, a sole proprietorship, sells only one product. The regular price is $160. Variable costs are 55% of this selling price, and fixed costs are $8,400 a month. Management decides to decrease the selling price from $160 to $145 per unit. Assume that the cost of the product and the fixed operating expenses are not changed by this pricing decision. Required: Answer the following questions: (A) At the original selling price of $160 a unit, what is the contribution margin ratio? (B) At the original selling price of $160 a unit, what dollar volume of sales per month is required for Diana Company to break-even? (Round your answer to the nearest whole dollar.) (C) At the original selling price of $160 a unit, what dollar volume of sales per month is required for Diana Company to earn a monthly operating income of $6,500? (Round your answer to the nearest whole dollar.) (D) At the reduced selling price of $145 a unit, what is the contribution margin ratio? (E) At the reduced selling price of $145 a unit, what dollar volume of sales per month is required to break-even? (Round your intermediate percentage to one decimal place and final answer to the nearest whole dollar.)

Answer rating: 100% (QA)

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