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The product that Menorah Corp. currently sells, candle operas, has fixed costs of $20,000, a sales price of $10 per candle opera and a variable cost of $4 per candle opera. If the fixed costs were to increase by 8 percent and the sales price and variable costs were to increase by 10 percent, how would the breakeven point in units, the contribution margin per unit, and the contribution margin ratio be affected?
-Given these changes, to earn a profit of $10,000, the company must sell how many candle operas. (Remember they cannot sell partial candle operas)

Question

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The new fixed costs are $21,600, the new sales price is $11, and the new variable cost is $4.40. The contribution margin per unit is $6.60, and the breakeven point in units is 3,273. To earn a profit of $10,000, the company must sell 4,788 units.

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