Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, e.g. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
Calculate the break-even point in units and sales dollars with no change in sales. (Round contribution margin ratio to 5 decimal places, e.g. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ur
![Ivanhoe Manufacturing Ltd. has provided you with the following CVP income statement:
Sales (5,500 units)
Variable costs
Contribution margin
Fixed costs
Operating income
$1,100,000
726,000
Break-even point
374.000
318,920
$55.080
$200 per unit
132 per unit
$68 per unit
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 dollars with no change in sales. (Round contribution margin ratio to 5 decimal
places, e.g. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
In units
$
In dollars](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F504bb1c1-58f9-4bc7-a118-4974b2faf73c%2Fabda9c89-2ed9-43d5-bf14-89146a22647f%2Fz1em3ir_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ivanhoe Manufacturing Ltd. has provided you with the following CVP income statement:
Sales (5,500 units)
Variable costs
Contribution margin
Fixed costs
Operating income
$1,100,000
726,000
Break-even point
374.000
318,920
$55.080
$200 per unit
132 per unit
$68 per unit
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 dollars with no change in sales. (Round contribution margin ratio to 5 decimal
places, e.g. 15.22456%. Round units to 0 decimal places, e.g. 5,275 and dollar amount to 2 decimal places, e.g. 15.25.)
In units
$
In dollars
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