Currently, the unit selling price of a product is $340, the unit variable cost is $280, and the total fixed costs are $720,000. A proposal is being evaluated to increase the unit selling price to $380. a. Compute the current break-even sales (units). fill in the blank 1 units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $380, and all costs remain constant. fill in the blank 2 units
Currently, the unit selling price of a product is $340, the unit variable cost is $280, and the total fixed costs are $720,000. A proposal is being evaluated to increase the unit selling price to $380.
a. Compute the current break-even sales (units).
fill in the blank 1 units
b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $380, and all costs remain constant.
fill in the blank 2 units
Break-even analysis is a technique widely used by the production department. It helps to determine the units to be sold to recover the total cost. It also helps to set the price of the product. Break-even analysis includes contribution margin, break-even, profit volume ratio, etc.
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