a. Breakeven point in sales units=7200 units
b. Breakeven point if the selling price were increased to $ 95 per unit=6400 units.
Workings:-
Normal scenario | If selling price is increased | |
Particulars | Amount in S | Amount in S |
Selling price p.u. (A) | 90 | 95 |
Variable expenses p.u. (B) | 50 | 50 |
Contribution margin p.u. (A-B=C) | 40 | 45 |
Total Fixed cost (D) | 288000 | 288000 |
Breakeven number of units (D/C) | 7200 | 6400 |
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