Answer:
The number of units needed to break even will decrease by 276 units
Explanation:
Giving the following information:
Total fixed expenses $48,000
Selling price per unit $45
Variable expenses per unit $30
Richland Enterprises can reduce fixed expenses by $4,140.
First, we need to calculate the actual break-even point in units:
Break-even point= fixed costs/ contribution margin
Break-even point= 48,000/ (45 - 30)= 3,200 units
New fixed costs= 48,000 - 4,140= 43,860
Now, we calculate the new break-even point:
Break-even point= 43,860 / 15= 2,924
The number of units needed to break even will decrease by 276 units.
