Kyonggi Machine Corporation in Suwon reports the following operating results for the month of June in 2020. KYONGGI MACHINE CORPORATION CVP Income Statement For the Month Ended June 30, 2020 (Currency Unit: Korean Won, ) Total per unit Sales(5000 units) 300,000,000₩ 60000₩ Variable costs 180,000,000 36000 Contribution margin 120,000,000 24000₩ Fixed expenses 100,000,000 Net income 20,000,000₩ To increase net income, management is considering reducing the selling price by 10%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 25% (Instructions) Compute the break-even point in units and monetary amount: (a) Assuming no changes to sales price or costs (b) Assuming changes to sales price and volume as described above. 2. Comment on your findings.
Kyonggi Machine Corporation in Suwon reports the following operating results for the month of June in 2020. KYONGGI MACHINE CORPORATION CVP Income Statement For the Month Ended June 30, 2020 (Currency Unit: Korean Won, ) Total per unit Sales(5000 units) 300,000,000₩ 60000₩ Variable costs 180,000,000 36000 Contribution margin 120,000,000 24000₩ Fixed expenses 100,000,000 Net income 20,000,000₩ To increase net income, management is considering reducing the selling price by 10%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 25% (Instructions) Compute the break-even point in units and monetary amount: (a) Assuming no changes to sales price or costs (b) Assuming changes to sales price and volume as described above. 2. Comment on your findings.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter22: Master Budget (master)
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Problem 1R: Ranger Industries has provided the following information at June 30: Other information: Average...
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- Kyonggi Machine Corporation in Suwon reports the following operating results for the month of June in 2020.
KYONGGI MACHINE CORPORATION
CVP Income Statement
For the Month Ended June 30, 2020
(Currency Unit: Korean Won, )
| Total | per unit | |
| Sales(5000 units) | 300,000,000₩ | 60000₩ |
| Variable costs | 180,000,000 | 36000 |
| Contribution margin | 120,000,000 | 24000₩ |
| Fixed expenses | 100,000,000 | |
| Net income | 20,000,000₩ |
To increase net income, management is considering reducing the selling price by 10%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 25%
(Instructions)
- Compute the break-even point in units and monetary amount:
(a) Assuming no changes to sales price or costs
(b) Assuming changes to sales price and volume as described above.
2. Comment on your findings.
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