Final answer:
The question involves calculating a new unit variable cost in order to achieve a specific break-even point for units. The calculation requires fixed cost and price per unit information, which is not provided, therefore an exact new variable cost cannot be calculated. The concept of average variable cost is essential in ensuring the business does not operate at a loss.
Step-by-step explanation:
The student question pertains to the break-even analysis in a business context. To adjust the break-even units to 11,200 without changing the price or fixed cost, one must calculate the new unit variable cost. This is done by using the formula for break-even point in units, which is the total fixed costs divided by the price per unit minus the variable cost per unit.
Given that the break-even units are to be 11,200, let P be the price per unit, V be the variable cost per unit, and F be the total fixed cost. Then, the break-even point formula is 11,200 = F / (P - V). Unfortunately, without specific values for F and P, we cannot compute an exact value for V.
However, referencing the information provided on average variable costs, it suggests that the price must stay above the minimum average variable cost to avoid shutting down. Average variable cost is found by dividing the total variable cost by the quantity of output. As fixed costs are spread over a larger number of units, the average variable cost sneaks closer to the average total cost, which includes both average variable cost and average fixed cost.