If fixed costs are $338,000, the unit selling price is $72, and the unit variable costs...

Question

Question

If fixed costs are $338,000, the unit selling price is $72, and the unit variable costs are $54, the old and new break-even s

Answer 1

Answer #1

b. 18,778 units and 14,696 units

Old Break-even sales	=	Fixed Cost	/	(Old Unit Selling Price - Variable cost per unit)
	=	$3,38,000.00	/	(72.00-54.00)
	=	$3,38,000.00	/	$18.00
	=	18,778 units

New Break-even sales	=	Fixed Cost	/	(Old Unit Selling Price - Variable cost per unit)
	=	$3,38,000.00	/	(77.00-54.00)
	=	$3,38,000.00	/	$23.00
	=	14,696 units


Note:

Break even point is the level of activity at which there is no profit no loss.

Answer 2

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