Question

Break-Even Point

Nicolas Enterprises sells a product for $95 per unit. The variable cost is $43 per unit, while fixed costs are $1,116,752.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $102 per unit.

a. Break-even point in sales units	units
b. Break-even point if the selling price were increased to $102 per unit	units

Answer 1

Requirement a

A	Sale price	$    95.00
B	Variable cost per unit	$    43.00
C=A-B	Unit Contribution margin	$   52.00
D	Total fixed cost	$   11,16,752.00
E=D/C	Break Even point in Units	21476

Requirement 2

A	Sale price	$    102.00
B	Variable cost per unit	$   43.00
C=A-B	Unit Contribution margin	$ 59.00
D	Total fixed cost	$ 11,16,752.00
E=D/C	Break Even point in Units	18928

a. Break-even point in sales units	21476 units
b. Break-even point if the selling price were increased to $102 per unit	18928 units