Never Late Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Compute the break-even point in both sales dollars and units under each of the following independent assumptions. Comment on why the break-even points are different. -Selling price is increased by 10%. (Fixed costs are $60,000.) -Variable cost is increased to $4.50 per unit. (Fixed costs are $60,000 and selling price is $9.)
Never Late Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Compute the break-even point in both sales dollars and units under each of the following independent assumptions. Comment on why the break-even points are different. -Selling price is increased by 10%. (Fixed costs are $60,000.) -Variable cost is increased to $4.50 per unit. (Fixed costs are $60,000 and selling price is $9.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Never Late Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and
fixed costs are $60,000 per month.
Compute the break-even point in both sales dollars and units under each of the following
independent assumptions. Comment on why the break-even points are different.
-Selling price is increased by 10%. (Fixed costs are $60,000.)
-Variable cost is increased to $4.50 per unit. (Fixed costs are $60,000 and selling price is $9.)
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