Nicolas Enterprises sells a product for $59 per unit. The variable cost is $30 per unit, while fixed costs are $114,376.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $64 per unit.
| a. Break-even point in sales units | units |
| b. Break-even point if the selling price were increased to $64 per unit | units |
a.Contribution margin=Sales-Variable cost
=(59-30)=$29 per unit
Hence breakeven=Fixed cost/Contribution margin
=114,376/29=3944 units
b.Contribution margin=Sales-Variable cost
=(64-30)=$34 per unit
Hence breakeven=Fixed cost/Contribution margin
=114,376/34=3364 units
| Break-even point in sales units | 3944 units |
| Break-even point if the selling price were increased to $64 per unit | 3364 units |
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