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CULLUMBERCOMPANY CVP Income Statement For the Month Ended April 30, 2022 Sales (9,540 units) Variable costs Contribution margin Fixed expenses Net income Total $477,000 286,200 190,800 159,000 $31,800 Per Unit Percent of Sales $50 30 $20 100 % 60 40 %

CULLUMBERCOMPANY CVP Income Statement For the Month Ended April 30, 2022 Sales (9,540 units) Variable costs Contribution margin Fixed expenses Net income Total $477,000 286,200 190,800 159,000 $31,800 Per Unit Percent of Sales $50 30 $20 100 % 60 40 %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cullumber Company reports the following operating results for the month of April. CULLUMBERCOMPANY CVP Income Statement For the Month Ended April 30, 2022 Per Unit Sales (9,540 units) Variable costs Contribution margin Fixed expenses Net income Break-even point Break-even point Margin of safety Break-even point Total $477,000 Break-even point 286,200 Margin of safety 190,800 $ 159,000 $31,800 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%. $50 30 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 0 decimal places, e.g. 2,510.) (a) Assuming no changes to unit selling price or costs. $20 Percent of Sales 100 % (b1) Assuming changes to unit selling price and volume as described above. 60 units 40 % units
Transcribed Image Text:Cullumber Company reports the following operating results for the month of April. CULLUMBERCOMPANY CVP Income Statement For the Month Ended April 30, 2022 Per Unit Sales (9,540 units) Variable costs Contribution margin Fixed expenses Net income Break-even point Break-even point Margin of safety Break-even point Total $477,000 Break-even point 286,200 Margin of safety 190,800 $ 159,000 $31,800 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%. $50 30 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 0 decimal places, e.g. 2,510.) (a) Assuming no changes to unit selling price or costs. $20 Percent of Sales 100 % (b1) Assuming changes to unit selling price and volume as described above. 60 units 40 % units
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