If Highway 55 Studios can reduce fixed expenses by , by how much can variable expenses per unit increase and still allow the co

Question

4 years ago

8

mpany to maintain the original break even sales in units

1 answer:

solniwko [45] · Answer 1 · 2021-11-26T09:39:34+03:00

Answer:

$2.25

Explanation:

Please check the attached image for the full question used in answering this question

Breakeven sales is the quantity sold at which net income is equal to zero.

Breakeven sales = fixed cost / (price per unit - variable cost per unit )

$1,215,000 / ($80 - $35) = 27,000

If Highway 55 Studios can reduce fixed expenses by $60,750, variable cost =

27,000 = ($1,215,000 - $60,750) / ($80 - V)

27,000 = 1,154,250 / ($80 - V)

V = $37.25

Variable cost would increase by : $37.25 - $35 = 2.25

If Highway 55 Studios can reduce fixed expenses by ​, by how much can variable expenses per unit increase and still allow the co