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The income statement for Fellows, Inc., is as follows: Fellows produces and sells a single product. The income statement is based on sales of 100,000
The income statement for Fellows, Inc., is as follows: Fellows produces and sells a single product. The income statement is based on sales of 100,000 units. Required 1. Compute the break-even point in units and in revenues. 2. Suppose that the selling price increases by 10 percent. Will the break-even point increase or decrease? Recompute it. 3. Ignoring the price increase in Requirement 2, suppose that the variable cost per unit increases by $0.35. Will the break-even point increase or decrease? Recompute it. 4. Can you predict whether the break-even point increases or decreases if both the selling price and the unit variable cost increase? Recompute the break-even point incorporating both of the changes in Requirements 2 and 3. 5. Assume that total fixed costs increase by $50,000. (Assume no other changes from the original data.) Will the break-even point increase or decrease? Recompute it
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