Answer:
- BEP in unit: 4,000 units;
- In case fixed cost increases by 10%, New BEP in unit: 4,400 units.
- Net income: 1,000,000p.
- BEP in units if sale price to decrease : 8,000 units => Price change should not take place as it moves the company from making 1 million peso profit to a loss as sales in units (1,200 + 5,000 =6,200) is lower than break-even point ( 8,000 units).
Explanation:
Please find detailed calculations as below:
- BEP in unit is calculated as Fixed cost/ Margin earned by one product = 4,000,000/(3,000 - 2,000) = 4,000.
- New BEP in unit is calculated as New Fixed cost/ Margin earned by one product = (4,000,000 x 1.1)/(3,000 - 2,000) = 4,400.
- Net income: Sales - fixed cost - variable cost = 3,000 x 5,000 - 4,000,000 - 2,000 x 5,000 = 1,000,000 p
- BEP in units if sale price to decrease: Fixed cost/ Margin earned by one product = 4,000,000/(2,500 - 2,000) = 8,000.
