NoWeeds, Inc.has variable costs equal to 25% of sales.Its selling price is $95 per unit.If NoWeeds sells one unit more than the number of break-even units, how much will profit increase?

Question

Quizplus · Accepted Answer

Selling one unit more than the break-even point means all revenue from that unit is profit, except for the variable costs. The variable cost per unit is 25% of $95, which is $23.75. Therefore, the profit increase from selling one additional unit is $95 - $23.75 = $71.25.