Homework Answers
(a) Break Even Point in Sales (Units) :-
Fixed cost/Contribution per unit
Contribution per unit = SP pu – VC pu
= $62 - $42 = $20
BEP (Units) = $58000/$20 = 2900 units
(b) Break Even Point if the selling price were increased to $71 per unit :-
Revised contribution pu = $71 - $42 = $29
BEP (Units) = $58000/$29 = 2000 units
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