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Pharoah Batteries sells its specialty automobile batteries for $87 each, while its current variable cost per unit is $76. Total fixed costs (including depreciation and
Pharoah Batteries sells its specialty automobile batteries for $87 each, while its current variable cost per unit is $76. Total fixed costs (including depreciation and amortization expense) are $150,000 per year. Management expects to sell 25,000 batteries next year but is concerned that variable cost will increase next year due to material cost increases. What is the maximum variable cost per unit increase that will keep the EBIT from becoming negative? EBIT Variable cost increase LA per unit (Round answer to 2 decimal places, e.g. 15.25.)
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