Question

Corremy, the seing p ce or a product is S37G·the une vanable cosasso, and the stai need aosts are $1,0a,006. A lng price to $41 a. Compute the ourrent bresk-even sales funits). .ahat d to roar be ad b. Coro/e the arecoated break-even sales assning ขat tyhe urut setng proe is nveased and ae costs remain contant. 回く困案响 7 5 8 9 0 delete 凡 0 retur

Answer 1

Solution a:

current contribution margin per unit = Selling price - Variable cost per unit

= $370 - $300 = $70 per unit

Fixed costs = $1,001,000

Breakeven sales units = Fixed costs /contribution margin per unit = $1,001,000 / $70 = 14300 units

Solution b:

New contribution margin per unit = $410 - $300 - $110 per unit

Anticipated breakeven point = $1,001,000 / $110 = 9100 units