Exercise 20-6 Compute break-even point in sales dollars and units under varying assumptions; comment on...
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Exercise 20-6 Compute break-even point in sales dollars and units under varying assumptions; comment on results (L.O. 3, 4)
Never Late Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Compute the break-even point in both sales dollars and units under each of the following independent assumptions. Comment on why the break-even points are different.
a. The costs and selling price are as just given. b. Fixed costs are increased to $75,000. c. Selling price is increased by 10%. (Fixed costs are $60,000.) d. Variable cost is increased to $4.50 per unit. (Fixed costs are $60,000 and selling price is $9.)
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