Break-Even and Sensitivity Analysis
Paragraph: A company is considering launching a new product with fixed costs of $500,000 and variable costs of $20 per unit. The selling price per unit is $50.
Requirements:
1.Calculate the break-even point in units.
2.Calculate the break-even point in sales dollars.
3.Perform a sensitivity analysis by increasing the fixed costs by 10%.
4.Determine the new break-even point if the selling price decreases by 5%.