Sheridan Inc. sells a product for $78 per unit. The variable cost is $44 per unit, while fixed costs are $298,248.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $87 per unit.
a. Break-even point in sales units | units |
b. Break-even point if the selling price were increased to $87 per unit | units |
a.Contribution margin=Sales-Variable cost
=(78-44)=$34 per unit
Breakeven=Fixed expenses/Contribution margin
=298,248/34
=8772 units
b.Contribution margin=Sales-Variable cost
=(87-44)=$43 per unit
Breakeven=Fixed expenses/Contribution margin
=298,248/43
=6936 units
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