Question
Grosheim Incorporated has fixed expenses of $ 211 comma 500 $211,500 per year. Rightnow, Grosheim Incorporated is selling its products for $ 250 $250 per
Grosheim Incorporated has fixed expenses of $ 211 comma 500
$211,500 per year. Rightnow, Grosheim Incorporated is selling its products for $ 250
$250 per unit. Management is contemplating a 30
30% increase in the selling price for the next year. Variable costs are currently 20
20% 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 nextyear).
If fixed costs increase 20
20% nextyear, and the new selling price per unit goes intoeffect, how many units will need to be sold tobreakeven?
A.
677
677 units
B.
253 comma 800
253,800 units
C.
923
923 units
D.
846
846 units
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started