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With a reduction in sales price per unit and an increase in sales by 25%, the relevant calculations are shown below: New SP per unit = $22.50 Sales = 5,000 units A Different Situation Consider the following situation: Sales (5,000 @ 22.50) = $112,500 Variable costs (5,000 @ 15) = 75,000 Contribution margin = 37,500 Fixed costs = 30,000 Net profit = 7,500 BE point = 4,000 units BE sales revenue = 90,000 P/V ratio = 33.33% MOS ratio = 20% The proposed change is not desirable