163k views
1 vote
If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, the old and new break-even sales (units), respectively, if the unit selling price increases by $10 are a.18,000 units and 12,857 units b.6,000 units and 5,294 units c.18,000 units and 6,000 units d.9,000 units and 15,000 units

User Jkee
by
8.2k points

1 Answer

5 votes

Answer:

a.18,000 units and 12,857 units

Step-by-step explanation:

The computation is shown below:

As we know that

Break even in units = Fixed Cost ÷ Contribution margin per unit

where,

Fixed cost = $450,000

Contribution margin per unit

= Selling price per unit - variable cost per unit

= $75 - $50

= $25

So, the break even point in units is

= $450,000 ÷ $25

= 18,000 units

Now

The new break even sale in units is

= $450,000 ÷ ($85 - $50)

= $450,000 ÷ $35

= 12,857 units

User Nirvana Tikku
by
8.0k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories