Question

Baldwin has a new design for their product Bill next round that can reduce their material cost of producing units from $8.14 to $7.32. Baldwin passes on half of all cost savings by cutting the current price to customers. For simplicity:
- Use current labor costs of $4.17
- Assume all period costs as reported on Baldwin's Income Statement (Annual Rpt Pg 2) will remain the same.

Determine how many units (000) of product Bill would need to be sold next round to break even on the product.

Answer 1

Answer:

Hie, the information you have provided is incomplete.

However important information is explained as follows :

To calculate Break - even Point use the formula;

Break even Point (units) = Total Budgeted Fixed Costs / Contribution per unit

Break even Point is the level of operation at which a firm neither makes a profit nor a loss.

Contribution is Calculated as :

Sales : No information                                xxxx

Less Variable Costs ( Materials + Labor) $11,49

Contribution per unit                                   xxxx