Problem 4 Cost Volume Profit Analysis 14 total points

Kerplunk Industries produces one type of noisy toy with the following price and costs:

Sales price $9.80 per unit

Variable cost 6.30 per unit

Total fixed costs 175,000 per year

Required:

2. What would be the breakeven point in units if the sales price decreased by $.50/unit? Show computation below.

3. Independent from questions 5 & 6, what would be the breakeven point in units if fixed costs increased by $25,000? Show computation below.

4. Independent from question 5, what would be the breakeven point in units if variable cost per unit decreased by 30%? Show computation below.