Question

Current:

5,500,000 units sold per year at $0.50 per unit. Fixed costs are $1,140,000 annually. Variable costs are $0.20 per unit.

20% increase in fixed costs and a 20% increase in units sold results in a new operating (gain or loss) of____________?

40​% decrease in fixed​ costs, with a 40​% decrease in selling​ price, 10​% decrease in variable cost per​ unit, and a 45​% increase in units sold results in a new operating (gain or loss) of____________?

What is the new breakeven in units with 20​% increase in fixed costs?

What is the new breakeven in units with 20​% increase in selling price and $10,000 increase in fixed costs?

Answer 1

Answer:
1. $612000
2. $273000
3. 4560000 units
4. 2875000 units

Formula Used:

Break even units = Fixed cost/(selling price per unit - Variable price per unit)

Current: S.P her unit Units sold Fixed costs = $ 1140,000 Variable cost per unit = $0.2. 55ooooo 16 New Fixed Cost Units sold 1140000 x 1.2 =$1368000 S S00000 x 1.2 = 6600000 Caluation of Profits Partumlars Soles (6600000 x 0.5) Less Variable cost ( 6600000x02) Contribution Less Fixed cost Amount (6) 3300000 1320000 1368000 6/2000 operating Profit Selling Price 12 New Fixed cost - 1140000 x0,6 = $684000 0.58 0.6 Variable Cost = 0.2 x 0.9 = $0.18 Units sold = 5500000 x 1.45 7975ooo Caletation of Profits Particulos Amount ($) Sales (7975000x 0.3) 2392Doo Less Variable Cost (797500x018) 1435500 Contribution 957000 Less: Fised Cost operating profil 684000 273000

3 Fisced Cost = 1140000 X 12 = $1368000 S.P her unit $ 0.5 Variable cost per unit = $0.2 Break Even Unit Fical lost Sopperenit-Varebbe cost her unit 1368000 4560ooo unite 0.5-0.2 D Fisced Cost = 111000 11000 = $115oooo S-P per unit = 0.5X12 = $0.6 Varable Cost per unit = $0.2 Break Even Units || 50000 = 2875000 units 0.6-0.2