Walter Corporation sells radios for $50 per unit. The fixed costs are $420,000 a

Question

Walter Corporation sells radios for $50 per unit. The fixed costs are $420,000 and the variable costs are 60% of the selling price. As a result of new automated equipment, it's anticipated that fixed costs will increase by $100,000 and variable costs will be 50% of the selling price. The new break-even point in units is: A. 21,000 B. 20,800 C. 20,600 D. 16,800 Cunningham Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $90,000. What sales are needed by Cunningham to break even? A. $120,000 B. $225,000 C. $270,000 D. $360,000

Explanation / Answer

Walter Corporation sells radios for $50 per unit. The fixed costs are $420,000 and the variable costs are 60% of the selling price. As a result of new automated equipment, it's anticipated that fixed costs will increase by $100,000 and variable costs will be 50% of the selling price.

The new break-even point in units is:

A. 21,000

B. 20,800

C. 20,600

D. 16,800

===============

Cunningham Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $90,000. What sales are needed by Cunningham to break even?

A. $120,000

B. $225,000

C. $270,000

D. $360,000

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