Currently, fixed costs are $450,000, the unit selling price is $75, and the unit variable cost is $50. What would be the break-even sales (in units), if the unit selling price is increased by $5?

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit. With the increased selling price of $80 ($75 + $5), the contribution margin per unit is $30 ($80 - $50). Therefore, the break-even sales in units is $450,000 / $30 = 15,000 units.

Currently, Fixed Costs Are $450,000, the Unit Selling Price Is