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A product has a contribution margin of $7 per unit and a selling price of $45 per unit. Fixed costs are $35,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $20,650, what is the new breakeven point in units

Respuesta :

Answer:

5,300

Explanation:

Given that,

contribution margin per unit = $7

selling price = $45 per unit

Fixed costs = $35,000

Total fixed cost after increase:

= $35,000 +  $20,650

= $55,650

contribution margin per unit after increase:

= $7 + (50% × $7)

= $7 + $3.5

= $10.5

Therefore,

New Break even point:

= Fixed cost ÷ Contribution per unit

= $55,650 ÷ $10.5

= 5,300

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