Xerox Company has the following information available:
$\begin{array} { l }
\text {Selling price per unit }&\$100\
\text {Variable cost per unit }&\$45\
\text { Fixed costs per year}&\$420,000\
\text {Expected sales per year (units) }&20,000\
\end{array}$

If variable costs increase to $65 per unit,what is the break-even point in units?
A) 12,000
B) 13,000
C) 20,000
D) none of the above

Question

Xerox Company has the following information available:
$\begin{array} { l  }
 \text {Selling price per unit }&\$100\
 \text {Variable cost per unit }&\$45\
 \text { Fixed costs per year}&\$420,000\
 \text {Expected sales per year (units) }&20,000\
\end{array}$

If variable costs increase to $65 per unit,what is the break-even point in units?
A) 12,000
B) 13,000
C) 20,000
D) none of the above

Quizplus · Accepted Answer

Explanation:The break-even point is the point at which total revenue equals total costs. To calculate the break-even point, we can use the following formula:Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)If variable costs increase to $65 per unit, the new break-even point would be:Break-even point = $420,000 / ($100 - $65) = 12,000 units

Xerox Company Has the Following Information Available If Variable Costs Increase to $65 Per Unit,what Is the