Gladstorm Enterprises sells a product for $50 per unit. The variable cost is $31 per unit, while fixed costs are $14,725. Determine the following: Round your answers to the nearest whole number.

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ayokenny2001 ayokenny2001 · Answer 1 · 2022-08-16T18:28:45+02:00

Break-even point in sales units if the selling price was increased to $60 per unit = 359.15 units

(a) Contribution margin per unit:

= Selling price - Variable cost

= $50 - $31

= $19

Break-even point in sales units:

= Fixed costs ÷ Contribution margin per unit

= $14,725 ÷ $19

= 775 units

(b) If the selling price increased to $60 per unit,

Contribution margin per unit:

= Selling price - Variable cost

= $60 - $19

= $41

Break-even point in sales units:

= Fixed costs ÷ Contribution margin per unit

= $14,725 ÷ $41

= 359.15 units

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The complete question is seen below:

Determine the break-even point in sales units. Round answer to the nearest whole number units.

Determine the break-even point in sales units if the selling price was increased to $60 per unit. Round answer to the nearest whole number units.