If fixed costs are $240,000, the unit selling price is $32, and the unit variable costs are $20, what are the old and new break-even sales (units) if the unit selling price increases by $4?
A) 7,500 units and 6,667 units
B) 20,000 units and 30,000 units
C) 20,000 units and 15,000 units
D) 12,000 units and 15,000 units

Question

Quizplus · Accepted Answer

The old break-even point is calculated as $240,000 / ($32 - $20) = 20,000 units. With the new selling price of $36, the break-even point is $240,000 / ($36 - $20) = 15,000 units.

If Fixed Costs Are $240,000, the Unit Selling Price Is