Answer: Break-Even point ( in units)= Fixed Costs ÷ (Sales price per unit – Variable costs per unit)
Allison will have to sell 6 extra scarves next year just to pay for rising entrance fee costs.
Step-by-step explanation:
Formula :
Break-Even point ( in units)= Fixed Costs ÷ (Sales price per unit – Variable costs per unit)
Given, Price of knit scarves = $25
Contribution margin ratio = 60%
Contribution margin per unit = (Price of knit scarves) x (Contribution margin ratio )
= $(25 x 0.60 )
= $15
Current entrance fees = $900
Percentage in increase in entrance fees = 10%
Increase in entrance fees = 10% of $900 = $90
Extra scarves to be sold


Allison will have to sell 6 extra scarves next year just to pay for rising entrance fee costs.