?What is the current yearly operating income?

What is the current break$-$even point in units and in dollar sales? $($Round contribution margin ratio to $2$ ?decimal places, e$.$g $15\mathrm{.}25\%$

and final answers to O decimal places, e$.$g$.125.)$

Assuming that Michelle is correct, what is the maximum operating income that the firm could generate yearly? At how many units

and at what selling prices per unit would this operating income be generated? Assume that capacity is not a problem and total

fixed costs will be the same regardless of volume.

What would be the break$-$even points in units and in dollar sales using the selling prices you have determined?

Transcribed Image Text:

The vice-president of marketing, Michelle Walker, thinks that her firm can increase sales by 15,000 units for each $5-per-unit reduction in its selling price. The company's current selling price is $90 per unit and variable costs are $63 per unit. Fixed costs are $688,500 per year. The current sales volume is 35,500 units. Answer the following questions: The vice-president of marketing, Michelle Walker, thinks that her firm can increase sales by 15,000 units for each $5-per-unit reduction in its selling price. The company's current selling price is $90 per unit and variable costs are $63 per unit. Fixed costs are $688,500 per year. The current sales volume is 35,500 units. Answer the following questions: