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Break-Even Sales Currently, the unit selling price of a product is $230, the unit variable cost...

Break-Even Sales

Currently, the unit selling price of a product is $230, the unit variable cost is $190, and the total fixed costs are $420,000. A proposal is being evaluated to increase the unit selling price to $260.

a. Compute the current break-even sales (units).
units

b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $260, and all costs remain constant.
units

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Answer #1
Current Proposed
Sales Per unit $           230.00 $           260.00
Less :- Variable Cost $           190.00 $           190.00
Contribution $             40.00 $             70.00
Fixed Cost $ 4,20,000.00 $ 4,20,000.00
10500 6000
Break Even point for Unit Sales:- Fixed cost / Contribution
Current break-even sales (units) 10500
anticipated break-even sales (units) 6000
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