Question

In 2016, Akin Company sold 3,000 units at $750.00 each. Variable expenses were $375.00 per unit, and fixed expenses were $130,000. The same selling price is expected for 2017. Akin is tentatively planning to invest in equipment that would increase fixed costs by 17.00%, while decreasing variable costs per unit by 20.00%. What is the company's break-even point in units for 2017?

Answer 1

338

Step-by-step explanation:

Break even point = F/ P - V

F = fixed cost

P = price

V = variable cost

Change in fixed cost = $130,000 × 1.17 = $152,100

Change in variable cost = $375.00 × 0.80 = $300

$152,100 / $750.00 - $300 = $152,100 / $450 = 338

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