CostVolumeProfit: Company has fixed costs of $73,750, variable costs of $375 / unit and a selling price of ...?

Question

Company has fixed costs of $73,750, variable costs of $375 / unit and a selling price of $510 / unit. An increase in delivery costs added $40 / unit to the variable costs of producing each unit. 
How is the breakeven volume affected? Consider current situation and situation after the VC increase.
Round up your final answer properly to the nearest whole number.
The break even volume in units changed from:
______  units
 to
________  units.

Steven · Answer

original selling cost $510 - $375 variable per unit
$135 net profit

73750/135=546.296
or
547 units need to be sold to break even

another $40 per unit reduces the profit to $90 per unit
[oops, $95 per unit]
73750/95 = what the other guy said  :D
LOL

or
776.315 
or
777 units need to be sold to break even

so
the break even volume in units is changed from 547 to 777

? · Answer

$73,750/( $510-$375) = from 546 units
 $73,750/( $510-$415) = to 776 units

Trending News

CostVolumeProfit: Company has fixed costs of $73,750, variable costs of $375 / unit and a selling price of ...?

2 Answers