Question: For the current year ending January 31, Ringo Company expects fixed costs of $178,500 and a unit variable cost of $41.50. For the coming year, a new wage contract will increase the unit variable cost to $45. The selling price of $50 per unit is expected to remain the same.
Required:
Q1. Compute the break-even sales (in units) for the current year.
Q2. Compute the anticipated break-even sales (in units) for the coming year, assuming the new wage contract is signed.
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