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Beasley Company currently sells its products for​ $30 per unit. Management is contemplating a​ 10% increase in the selling price for the next year. Variable costs are currently​ 40% of sales revenue and are not expected to change in dollar amount on a per unit basis next year​ (the company will pay the same amount for variable costs next​ year). Fixed expenses are​ $68,250 per year. What is the breakeven point in units at the anticipated selling price per unit next​ year?

a. 2,170 units
b. 3,100 units
c. 5,425 units
d.1,447units

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facundobuzzetti

Answer:

Break-even point (in units)= 3,250 units

Explanation:

Giving the following information:

Selling price= $33 per unit.

Variable costs are currently​ 40% of sales revenue.

Fixed expenses are​ $68,250 per year.

First, we need to calculate the unitary variable cost:

Unitary variable cost= 30*0.4= $12

Break-even point= fixed costs/ contribution margin

Break-even point= 68,250/ (33 - 12)= 3,250 units

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