XYZ Inc. produces a machine that washes and dries your laundry in a single, compact unit that doesn't require existing washer/dryer hookups or venting. The machine is popular with RV & boat owners and with urban dwellers who live in small condos or apartments. Research has determined that demand for this product is elastic meaning that a small percentage change in price will result in a larger percentage change in demand. XYZ Inc. is considering lowering its price to increase revenue through increased sales volume. Given the information in the table below, what level of sales would be necessary for XYZ to break even on the proposed price reduction? In other words, how much would sales need to increase to maintain the total contribution that XYZ realized at the higher price? Current Total Sales S 3600000 Current Contribution Margin % 20 Current Unit Price $ 1600 Proposed Price Reduction % 10 Part 2 At the reduced price, the contribution margin would be enter your response here %. (Round to one decimal place.)

XYZ Inc. produces a machine that washes and dries your laundry in a single, compact unit that doesn't require existing washer/dryer hookups or venting. The machine is popular with RV & boat owners and with urban dwellers who live in small condos or apartments. Research has determined that demand for this product is elastic meaning that a small percentage change in price will result in a larger percentage change in demand. XYZ Inc. is considering lowering its price to increase revenue through increased sales volume. Given the information in the table below, what level of sales would be necessary for XYZ to break even on the proposed price reduction? In other words, how much would sales need to increase to maintain the total contribution that XYZ realized at the higher price? Current Total Sales S 3600000 Current Contribution Margin % 20 Current Unit Price $ 1600 Proposed Price Reduction % 10 Part 2 At the reduced price, the contribution margin would be enter your response here %. (Round to one decimal place.)

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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