Answers
Selling price per unit = $27
Variable cost per unit = $19
Fixed cost = $10,400
Contribution margin per unit = Selling price per unit - Variable cost per unit
= 27 - 19
= $8
1.
Break even point in units = Fixed cost/Contribution margin per unit
= 10,400/8
= 1,300
2.
Break even point sales dollar = Break even point in units x Selling price per unit
= 1,300 x 27
= $35,100
3.
Fixed expenses increased by $600
New fixed expense = 10,400 + 600
= $11,000
New Break even point in units = New fixed expense/Contribution margin per unit
= 11,000/8
= 1,375
New Break even point sales dollar = New Break even point in units x Selling price per unit
= 1,375 x 27
= $37,125
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