A company is considered a price setter when: ____________
2 answers:
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Answer:
Alternative A : 7,800 units
Alternative B: 5,250 units
Explanation:
Were:
for A:
15 - 10 = 5 contrbution margin
each unit contributes 5 dollars
then: $39,000 fixed cost / $5 per unit = 7,800 units
It need to sale 7,800 untis to pay the fixed cost generated for alternative A
for B:
15 - 11 = 4 contribution margin
each unit contributes 4 dollars
then: $21,000 fixed cost / $4 per unit = 5,250
It need to sale 5,250 units to pay the fixed cost for this alternative