Question

Zeke Company sells a single product. The selling price per unit is $32 and unit variable cost is $24. Fixed costs for the year are $100,200. What if selling price goes up by 0.15%, variable costs go up by 0.15% and fixed costs go up by 0.16%? What is the new breakeven point in units?

Answer 1

Answer:

Break-even point in units= 12,562 units

Explanation:

Giving the following information:

Selling price= 32*1.0015= 32.048

Unitary variable cost= 24*1.0015= 24.036

Fixed costs= 100,200*1.0016= 100,360.32

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

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

Break-even point in units= 100,360.32/(32.048 - 24.036)

Break-even point in units= 12,562 units