Marchete Company produces a single product. They have recently received the results of a market...
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Accounting
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)
________
Answer & Explanation
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