Question

If fixed costs are $288,000, the unit selling price is $75, and the unit variable costs are $49, the old and new break-even sales (units), respectively, if the unit selling price increases by $5 are a.3,840 units and 11,077 units b.11,077 units and 3,840 units c.11,077 units and 9,290 units d.5,878 units and 8,790 units

Answer 1

Results are below.

Step-by-step explanation:

Giving the following information:

Fixed costs= $288,000

Selling price= $75

Unitary variable costs= $49

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 288,000 / (75 - 49)

Break-even point in units= 11,077

Now, if the selling price is $80:

Break-even point in units= 288,000 / (80 - 49)

Break-even point in units= 9,290