Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2020 Sales (10,000 units) Variable costs Contribution margin Fixed expenses Net income $500,000 Break-even point Break-even point $ Total Margin of safety $ 300,000 Show Transcribed Text Break-even point Break-even point 200,000 Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. 140,000 Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places eg. 0.2522 and final answer to 0 decimal places, e.g. 2,510) (a) Assuming no changes to selling price or costs. $ $60,000 Margin of safety $ Per Unit Using the contribution margin technique, compute the break-even point in units and 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 selling price or costs. $50 30.00 $20.00 (b1) Assuming changes to sales price and volume as described above. 7000 units C units
Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2020 Sales (10,000 units) Variable costs Contribution margin Fixed expenses Net income $500,000 Break-even point Break-even point $ Total Margin of safety $ 300,000 Show Transcribed Text Break-even point Break-even point 200,000 Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. 140,000 Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places eg. 0.2522 and final answer to 0 decimal places, e.g. 2,510) (a) Assuming no changes to selling price or costs. $ $60,000 Margin of safety $ Per Unit Using the contribution margin technique, compute the break-even point in units and 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 selling price or costs. $50 30.00 $20.00 (b1) Assuming changes to sales price and volume as described above. 7000 units C units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Victoria Company reports the following operating results for the month of April.
VICTORIA COMPANY
CVP Income Statement
For the Month Ended April 30, 2020
Sales (10,000 units)
Variable costs
Contribution margin
Fixed expenses
Net income
$500,000
300,000
Break-even point
Break-even point $
Total
Show Transcribed Text
Margin of safety $
Break-even point
200,000
Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to
unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%.
Break-even point
140,000
Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round
intermediate calculations to 4 decimal places eg. 0.2522 and final answer to 0 decimal places, e.g. 2,510)
(a) Assuming no changes to selling price or costs.
$60,000
$
Using the contribution margin technique, compute the break-even point in units and 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 selling price or costs.
Margin of safety $
Per Unit
$50
30.00
$20.00
(b1) Assuming changes to sales price and volume as described above.
7000
units
units
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