If fixed costs are $450,000,the unit selling price is $75,and the unit variable costs are $50,what are the old and new break-even sales (units)if the unit selling price increases by $10?
A) 6,000 units and 5,294 units
B) 18,000 units and 6,000 units
C) 18,000 units and 12,857 units
D) 9,000 units and 15,000 units

Question

Quizplus · Accepted Answer

The old break-even point can be calculated as follows:
BEP(units) = Fixed Costs / (Unit Selling Price - Unit Variable Costs)
BEP(units) = $450,000 / ($75 - $50) = 18,000 units

To find the new break-even point, we need to use the new unit selling price of $85:
BEP(units) = $450,000 / ($85 - $50) = 12,857 units

Therefore, the old break-even sales (units) are 18,000 units and the new break-even sales (units) are 12,857 units. The correct answer is C.

If Fixed Costs Are $450,000,the Unit Selling Price Is $75,and