Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Marchete Company produces a single product. They have recently received the results of a market survey that indicates that they can increase the retail price
Marchete Company produces a single product. They have recently received the results of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. All other costs will remain unchanged. Their most recent CVP analysis is presented below.
Current | |
Units sold | 950 |
Sales Price per Unit | $120 |
Variable Cost per Unit | $97 |
Contribution Margin per Unit | $23 |
Fixed Costs | $19,665 |
Break-Even (in units) | 855 |
Break-Even (in dollars) | $102,600 |
Sales | $114,000 |
Variable Costs | $92,150 |
Contribution Margin | $21,850 |
Fixed Costs | $19,665 |
Net Income (loss) | $2,185 |
If they enact the 10% price increase, what will be their new break-even point in units and dollars? If required, round final answers to nearest whole number.
New Price | |
Break-even (in units) | ________ |
Break-even (in dollars) | ________ |
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