Question $4$ of $4$

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Cullumber Manufacturing Ltd$.$ has provided you with the following CVP income statement:

$\backslash$table$[[$Sales $(5,500$ units$),$$$1,100,000,$$$200,$per unit$],[$Variable costs,$660,000,120,$perunit$],[$Contribution margin,$440,000,$$$80,$per unit$],[$Fixed costs,$380,000,,],[$Operating income,$$60,000,,]]$

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 doliars with no change in sales. $($Round contribution maryin natio to $5$ decimal places, eg $15\mathrm{.}22456\%$ Round units to $0$ decimal places, eg$.5\mathrm{.}275$ and dollar amount to $2$ decimal places, eg $15\mathrm{.}25$ J

$\backslash$table$[[,$In units,In dollars$],[$Break$-$even point,,$]]$

Calculate the break$-$even point in units and sales dollars with the proposed change in sales price, $($Round units to $O$ decimal ploces, eg$.5,275$ and dollor amount to $2$ decimal places, eg$.15\mathrm{.}25.$

$\backslash$table$[[,$In units,In dollars$],[$Break$-$even point,$$,]]$

Should management go forward with the reduction in sales price?