Ivanhoe Company reports the following operating results for the month of April. IVANHOECOMPANY CVP Income Statement...
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Ivanhoe Company reports the following operating results for the month of April. IVANHOECOMPANY CVP Income Statement For the Month Ended April 30, 2022 Total Per Unit Percent of Sales Sales (4,860 units) $486,000 $100 100 % Variable costs 291,600 60 60 Contribution margin 194,400 $40 40 % Fixed expenses 162,000 Net income $32,400 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 10%. 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. 0.2522 and final answer to O decimal places, e.g. 2,510.) (a) Assuming no changes to unit selling price or costs. Break-even point Break-even point $ Margin of safety $ units (b1) Assuming changes to unit selling price and volume as described above. Break-even point Break-even point $ Margin of safety $ units Ivanhoe Company reports the following operating results for the month of April. IVANHOECOMPANY CVP Income Statement For the Month Ended April 30, 2022 Total Per Unit Percent of Sales Sales (4,860 units) $486,000 $100 100 % Variable costs 291,600 60 60 Contribution margin 194,400 $40 40 % Fixed expenses 162,000 Net income $32,400 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 10%. 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. 0.2522 and final answer to O decimal places, e.g. 2,510.) (a) Assuming no changes to unit selling price or costs. Break-even point Break-even point $ Margin of safety $ units (b1) Assuming changes to unit selling price and volume as described above. Break-even point Break-even point $ Margin of safety $ units
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Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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