Question

9021Pho is a manufacturer of luxury Vietnamese beef noodles. During the year, 9021Pho sold 3,153 units...

9021Pho is a manufacturer of luxury Vietnamese beef noodles. During the year, 9021Pho sold 3,153 units at $459 each. Variable costs were $323 per unit. Fixed expenses were $769,302. If 9021Pho cuts the selling price by 4%, what would be 9021Pho's new breakeven point in units? Do not round intermediary answers. Do not use $ signs in your final answer. Round your final answer to the nearest unit

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Answer #1
Calculation of new Break even point is as follows:
New Break even pount (units) = Fixed cost / Contribution margin per unit
= 769,302 / 117.64
= 6539 units
Thus, Break even sales is 6539 units
Working note:
If 9021Pho cuts the selling price by 4%.
Revised selling price per unit = 459 - 4% = 440.64
New Contribution margin per unit = Revised Selling price per unit - Variable expenses per unit
= 440.64 - 323
= 117.64
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