Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price.
Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating each question.
At the proposed increased selling price of $190 per unit, closest to what dollar volume of sales per month is required to break-even? (Round your intermediate percentage to one decimal place.)
Multiple Choice
$19,747
$18,480
$10,400
$9,123
Correct answer--------------$19,747
Working
Sales price per unit | $ 190.00 |
Variable cost per unit | $ 130.00 |
Contribution margin per unit | $ 60.00 |
Contribution margin ratio | 31.6% |
Fixed cost | $ 6,240.00 |
Break Even point in Dollar (6240/31.6%) | 19,747 |
Griggs Company produces a single product with a current selling price of $170. Variable costs are...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
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