Urban Incorporated had the following information:
-Suppose Urban could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 1,400 hours.How many units must be sold to break even in this case?

Question

Urban Incorporated had the following information:  
-Suppose Urban could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 1,400 hours.How many units must be sold to break even in this case?

Quizplus · Accepted Answer

To find the break-even point, we need to calculate the total fixed costs and divide them by the contribution margin per unit. Reducing setup costs by $300 per setup and engineering hours to 1,400 will affect the fixed costs. Assuming the contribution margin per unit remains constant, the new break-even point is 10,670 units.

Urban Incorporated Had the Following Information