Question

Laguna Print makes advertising hangers that are placed on doorknobs. It charges $0.04 and estimates its variable cost to be $0.01 per hanger. Laguna’s total fixed cost is $4,500 per month, which consists primarily of printer depreciation and rent. Suppose that the cost of paper has increased and Laguna’s variable cost per unit increases to $0.015 per hanger. Calculate its new break-even point assuming this increase is not passed along to customers. (Round your intermediate calculations to 3 decimal places and final answer to the nearest whole number.)

Answer 1

New break even point = 4500+0.015x=0.04x

0.025x=4500

x= 180,000

New break even point will be 180,000 units

Step-by-step explanation: