Homework Answers
Contribution margin per unit = $9
Increase in contribution margin per unit = 60%
= 9 x 60%
= $5.40
New contribution margin per unit = 9 + 5.4
= $14.40
Fixed cost = $45,000
Increase in fixed cost = 16,920
New fixed cost = 45,000 + 16,920
= $61,920
New break even point in units = New fixed cost/New contribution margin per unit
= 61,920/14.40
= 4,300 units
Third option is the correct option.
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