Homework Answers
a. Contribution margin per unit = Selling price per unit - Variable costs per unit
= $98 - $52
= $46
Break-even point = Fixed costs / Contribution margin per unit
= $464,600 / $46
= 10,100 units
b. Contribution margin per unit = Selling price per unit - Variable costs per unit
= $98 - $55
= $43
Break-even point = Fixed costs / Contribution margin per unit
= $360,000 / $43
= 8,372 units
c. The answer is Profitability will be more.
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