point was $30,000$ units. Management has proposed increasing the contribution margin per unit by $5\%$ and reducing fixed costs by $30\%.$

Read the requirements.

Requirement $a.$ Which action is the company likely to take to reduce fixed costs without impacting variable costs or the number of units sold?

To reduce the company's fixed costs in the short term, management will need to reduce its discretionary fixed costs. company picnics, advertising expenses, and discretionary bonuses.

Some examples of these types of costs might include

Requirement $b.$ What are the proposed contribution margin per unit and the proposed fixed costs? $($Round the proposed contribution margin per unit to the nearest cent, $x.xx.)$

Proposed contribution margin per unit $=$

Proposed fixed costs $=$

Requirements

a$.$ Which action is the company likely to take to reduce fixed costs without impacting variable costs or the number of units sold?

b$.$ What are the proposed contribution margin per unit and the proposed fixed costs?

c$.$ What will be the new breakeven point in units?

d$.$ Should management take the suggested action?

e$.$ Which questions would you pose of management beyond the information provided?