Contribution margin=Sales-Variable cost
=(28-24)=$4 per unit
a.Breakeven=Fixed expenses/Contribution margin
=(10,000/4)=2500 baskets
=(2500*28)=$70,000
b.New fixed expenses=(10,000+600)=10600
Hence new breakeven=(10600/4)=2650 baskets
=(2650*28)=$74200
Breakeven point in unit sales | 2500 baskets |
Breakeven point in dollar sales | $70,000 |
Breakeven point in unit sales | 2650 baskets |
Breakeven point in dollar sales | $74200 |
Mauro Products distributes a single product, a woven basket whose selling price is $28 per unit...
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