Cottonwood Company reports the following operating results for the month of April. COTTONWOOD COMPANY CVP...
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Cottonwood Company reports the following operating results for the month of April. COTTONWOOD COMPANY CVP Income Statement For the Month Ended April 30, 2020 Total Per Unit Sales (8.300 units) $415.000 $50 Variable costs 166.000 20 Contribution margin 249.000 $30 Fixed costs 210,000 Operating income $39.000 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 is confident that this change will increase unit sales by 30%. Using the contribution margin technique, calculate the break-even point in units and dollars and margin of safety in dollars. Assume no changes to selling price or costs. (Round answers to decimal places, eg. 125.) units Break-even point Break-even point Margin of safety $ $ Assume changes to sales price and volume as described above. (Round intermediate calculations to 2 decimal places, eg. 15.25 or 15.25% and final answers to decimal places, e.g. 125.) Break-even point Break-even point units $ Margin of safety $
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