Our company sells its product for $60 per unit and has a variable cost of $30 per unit. Total fixed costs equal $20,000. What would be the breakeven point in units if the sales price per unit decreased by $10? Group of answer choices5006671,0001,200
Question
Our company sells its product for 30 per unit. Total fixed costs equal 10? Group of answer choices5006671,0001,200
Solution
To calculate the breakeven point in units, we first need to determine the contribution margin per unit. The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit.
In this case, the selling price per unit has decreased by 60 - 50.
The variable cost per unit is $30.
So, the contribution margin per unit is 30 = $20.
Next, we divide the total fixed costs by the contribution margin per unit to find the breakeven point in units.
The total fixed costs are $20,000.
So, the breakeven point in units is 20 = 1,000 units.
Therefore, the breakeven point in units if the sales price per unit decreased by $10 is 1,000 units.
Similar Questions
A company manufactures and sells a single product with a variable costper unit of $36. It has a contribution ratio of 25%. The company has weeklyfixed costs of $18,000. What is the weekly breakeven point, in units?a) 1,500b) 1,600c) 1,800d) 2,000
Jane Corporation produces model toy cars. Each sells for $25.75. Its variable cost per unit is $12.44. Assuming it has a fixed cost of $264,869. What is the breakeven point for Jane Corporation?
Our company sells a product for $120 per unit. Variable costs are $90 per unit and fixed costs are $9,000. The company expects to sell 500 units this year. How many units must we sell to break even?Group of answer choices300320360400
TechFab Manufacturing sells a product for $50 per unit. The variable cost per unit is $30, and the total fixed costs are $10,000. How many units must TechFab Manufacturing sell to break even?
A company has a fixed cost of $50,000 and a contribution margin ratio of 40%. What is the breakeven point in dollars? A. $125,000 B. $100,000 C. $75,000 D. $62,500
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.