Answer:
It's necessary to sale 1.400 units.
It's necessary to sale an amount of $ 21.000 .
It's necessary to sale 1.400 units and in dollar sales the break even point it's $ 24.000 .
Explanation:
The first break even point indicates the next:
Woven Basket
Quantity 1.400
TOTAL Income Statement Unit
$ 21.000 Total Net Sales $ 15
-$ 16.800 Variable Cost -$ 12
$ 4.200 Contributing Margin $ 3
-$ 4.200 Anual Fixed Costs
When the Fixed costs changes it's necessary to find a new break even point:
TOTAL Income Statement Unit
$ 24.000 Total Net Sales $ 15
-$ 19.200 Variable Cost -$ 12
$ 4.800 Contributing Margin $ 3
-$ 4.800 Anual Fixed Costs
Answer:
1. The company’s break-even point in unit sales is 1,400 units
2. The company’s break-even point in dollar sales is $21,000
3. If the company's fixed expenses increase by $600, the new break-even point in unit sales is 1,600 units and $24,000 in dollar sales.
Explanation:
1. The company’s break-even is when total revenues = total cost
⇔ Sales = Fixed cost + variable cost
⇔ Selling price per unit * number of units = Fixed cost + variable expense per unit * number of units
⇔$15 * number of units = $4,200 + $12 * number of units
⇒ Number of units = $4,200/ ($15 - $12) = 1,400
2. Calculate the company’s break-even point in dollar sales.
= Selling price per unit * number of units
= $15 *1400 = $21,000
3. If the company's fixed expenses increase by $600, then we have:
$15 * number of units = ($4,200 +600) + $12 * number of units
⇒ number of units = 4,800/(15-12) = 1,600
Sales = $15 * 1,600 = $24,000
