Question

if fixed costs are \\$500,000, the unit selling price is \\$55, and the unit variable costs are \\$30, the break-even sales (units) if fixed costs are increased by \\$80,000 is

a. 23,200 units
b. 10,545 units
c. 19,333 units
d. 23,200 units

Explanation:

Calculate the new total fixed costs

Using the Fixed Cost knowledge point

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$$

Calculate the unit contribution margin

Using the Unit Contribution Margin knowledge point

$$
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$$

Calculate the new break-even sales in units

Using the Break-Even Analysis knowledge point

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$$

Answer:

• a. 25,000 units
• b. 10,545 units
• c. 19,333 units
• d. 23,200 units (Correct answer)