Product A currently sells for $12 per unit. The variable cost is $4 per unit and 10,000 units are sold annually and a profit of $30,000 is realized yearly. A new design of this product will increase the variable cost by 20% and fixed cost by 10% but sales will increase to 12,000 units per year. At what selling price do the break even occurs for the new design?
Product A currently sells for $12 per unit. The variable cost is $4 per unit and 10,000 units are sold annually and a profit of $30,000 is realized yearly. A new design of this product will increase the variable cost by 20% and fixed cost by 10% but sales will increase to 12,000 units per year. At what selling price do the break even occurs for the new design?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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Transcribed Image Text:Product A currently sells for $12 per unit. The variable cost is $4 per unit and 10,000 units
are sold annually and a profit of $30,000 is realized yearly. A new design of this product
will increase the variable cost by 20% and fixed cost by 10% but sales will increase to
12,000 units per year. At what selling price do the break even occurs for the new design?
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