Question
Given the standard breakeven calculation Breakeven in units = Fixed Costs / (Unit Price - Unit Variable Cost) and assuming the following data: Fixed Costs
Given the standard breakeven calculation Breakeven in units = Fixed Costs / (Unit Price - Unit Variable Cost) and assuming the following data: Fixed Costs = $50,000 (per month) Unit Price = $25 per unit Unit Variable Cost = $15 per unit calculate the breakeven conditions for the following: 1. The base case (above) 2. Unit Variable Costs increase by 10% 3. Fixed Costs increase by 10% 4. Both Unit Variable Costs and Fixed Costs increase by 10% 5. Base case + a volume purchase schedule that reduces prices by 0% for 30% of orders, 5% for 40% of orders, and 10% for the remaining 30% of orders. 6. Combine case 2 and case 5 7. Combine case 3 and case 5 8. Combine case 4 and case 5. Finally, are you profitable (and how profitable as a percentage of sales) at sales rates of 4,500, 5,000, 5,500 and 6,000 units per month?
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