Question

Radison Enterprises sells a product for $114 per unit. The variable cost is $63 per unit, while fixed costs are $741,285. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $120 per unit. a. Break-even point in sales units fill in the blank 1 units b. Break-even point if the selling price were increased to $120 per unit

Answer 1

Results are below.

Step-by-step explanation:

Giving the following information:

Selling price= $114

Unitary variable cost= $63

Fixed costs= $741,285

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= 741,285 / (114 - 63)

Break-even point in units= 14,535

Now, the break-even point if the selling price is $120:

Break-even point in units= 741,285 / (120 - 63)

Break-even point in units= 13,005