The breakeven point in units for the company's new product is 16,000 units.
How to solve
To determine the breakeven point in units for the company's new product, we'll use the formula:
Breakeven Point (Units) = Fixed Costs / (Sales Price per Unit - Variable Costs per Unit)
Given the fixed costs are $80,000, the variable costs per unit are $5, and the selling price per unit is $10, we can plug these values into the formula:
Breakeven Point (Units) = $80,000 / ($10 per unit - $5 per unit)
Breakeven Point (Units) = $80,000 / $5 per unit
Breakeven Point (Units) = 16,000 units
Therefore, the breakeven point in units for the company's new product is 16,000 units.
Among the given options, only option E) 16,000 units matches the calculated breakeven point.
So, the correct answer is e) 16,000 units.
The Complete Question
To calculate the breakeven point in units for the company's new product, which fixed costs are $80,000, variable costs per unit are $5, and the product's selling price is $10 per unit.
a) 6,500 units
b) 7,000 units
c) 7,500 units
d) 8,000 units
e) 16,000 units
Among these options, which number of units is the correct breakeven point for the new product after solving the breakeven analysis?