Currently, the Unit Selling Price Is $50, the Variable Cost

question 129

Short Answer

Currently, the unit selling price is $50, the variable cost, $34, and the total fixed costs, $108,000. A proposal is being evaluated to increase the selling price to $54.
(a) Compute the current break-even sales (units).
(b) Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price, holding all else constant.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, typically used to assess inflation.

Inflation Rate

The growth rate in the common price range for goods and services, downgrading the practical purchasing scope.

Money Supply

The aggregate financial assets at a specific time in an economy.