Question
It is Jan 1, 2022, and Jasmin is evaluating her financial results from last year. She sold one product for $65 each and sold 1500
It is Jan 1, 2022, and Jasmin is evaluating her financial results from last year. She sold one product for $65 each and sold 1500 units. Her variable costs totaled $60000 while fixed costs worked out of to $10 per unit. Jasmin is considering buying new equipment which would lower her per unit variable cost by one quarter. However, her fixed costs would double. In this situation, she would increase the price by $5 per unit and she projects that her sales total will drop by 10%.
give some advice including break-even analysis and margin of safety, explain the changes in Jasmin's CVP graph when transiting from the first to the second scenario.
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