3. Penury Company offers two products. At present, the following represents the

Question

3. Penury Company offers two products. At present, the following represents the usual results of a month's operations:

Required (35 points):

a. Find the break-even point in dollars.

b. Find the margin of safety in dollars.

c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. Would you advise adopting this plan?

d. Refer to (c) above. Under the new plan, find the break-even point in dollars.

e. Under the new plan in (c) above, find the margin of safety in dollars.

Explanation / Answer

3. Penury Company offers two products. At present, the following represents the

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