Deen Enterprises currently sells its products for $1600 per unit. Management is contemplating a 20% increase...
Deen Enterprises currently sells its products for $1600 per
unit. Management is contemplating a 20% increase in the selling
price for the next year. Variable costs are currently 30% of sales
revenue and are not expected to change next year. Fixed expenses
are $280,800 per year.
What is the breakeven point in units at the anticipated selling
price per unit next year?
|
480 units |
||
|
195 units |
||
|
1755 units |
||
|
117 units |
Homework Answers
Current variable cost = 1600*30% = 480
New sales price = 1600 + 20% = 1920
Breakeven point
= Fixed cost /Contribution margin per unit
= 280,800/(1920 - 480)
= 195 units
Option B is the answer
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