Homework Answers
Currently:
Contribution margin=Sales-Variable cost
=(20-11)=$9 per unit
Breakeven=Fixed expenses/Contribution margin
=(30,000/9)
=3333.33 units
Now;
Selling price=20*(1-0.1)=$18
Hence contribution margin would be=18-11
=$7 per unit
Hence new breakeven=30,000/7
=4285.71 units(Approx)
Hence change in breakeven=(4285.71-3333.33)/3333.33
=28.57%(Approx)
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