Break-Even Point Nicolas Enterprises sells a product for $99 per unit. The variable cost is $45...
Break-Even Point
Nicolas Enterprises sells a product for $99 per unit. The variable cost is $45 per unit, while fixed costs are $734,832.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $108 per unit.
| a. Break-even point in sales units | units |
| b. Break-even point if the selling price were increased to $108 per unit | units |
Homework Answers
a. Break-even points in sales units
= (Fixed cost / contribution margin per unit)
Fixed cost = $734,832
Contribution margin per unit = Sales price - variable cost
= $99 - $54
= $54
Break even point in sales units = ($734,832 / $54)
= 13,608 units
b. Break even point if the selling price were increased to $108 per unit
New Contribution margin per unit = New selling price - variable cost
= $108 - $45
= $63
Break even point in sales units = ($734,832 / $63)
= 11,664 units
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Break-Even Point
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