Homework Answers
Answer
· Correct Answer = Option ‘C’ 600 unit decrease
· Working for above
|
Current situation |
Situation after new machine |
Increase (Decrease) in Break even |
||
|
A |
Sale price per unit |
$50 |
$50 |
|
|
B |
Variable cost per unit |
$24 |
$21 |
|
|
C = A - B |
Contribution margin per unit |
$26 |
$29 |
|
|
D |
Fixed Cost |
$260,000 |
$272,600 |
|
|
E = D/C |
Break even point in units |
10000 |
9400 |
(600) [from 10000 to 9400] |
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