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jasenka [17]
3 years ago
7

Sheridan Company sells radios for $50 per unit. The fixed costs are $445000 and the variable costs are 60% of the selling price.

As a result of new automated equipment, it is anticipated that fixed costs will increase by $65000 and variable costs will be 50% of the selling price. The new break-even point in units is:
Business
1 answer:
NeTakaya3 years ago
6 0

Answer:

Break-even point in units= 2,600

Explanation:

<u>To calculate the break-even point in units, we need to use the following formula:</u>

<u></u>

Break-even point in units= fixed costs/ contribution margin per unit

Fixed costs= $65,000

Contribution margin per unit= 50*0.5= $25

Break-even point in units= 65,000/25

Break-even point in units= 2,600

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