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Homework answers / question archive / The following information provided by Lenovo Inc
The following information provided by Lenovo Inc. for one of its products: Units sold (Q) 16,000 Variable expenses per unit (V) $82 Selling price per unit (P) $100 Fixed expenses $230,000 Required: 1. Calculate unit contribution margin and contribution margin ratio 2. Calculate break-even point in units 3. Calculate sales in dollar amount to achieve net income of $90,000 4. Calculate margin of safety. 5. Increasing selling price by 25% will require using high quality components that will increase variable expense by 8 $/unit. This proposal also requires renting new show room for 90,000 $/year. Do you recommend the proposal? Why?
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