Breakeven Analysis
At the beginning of each year, LED Lighting, Ltd.'s Accounting Department must find the point at which projected sales revenue will equal total budgeted variable and fixed costs. The company produces low-voltage outdoor lighting systems. Each system sells for an average of $435. Variable costs per unit are $210. Total fixed costs for the year are estimated to be $166,500.
Required:
1. Compute the breakeven point in sales units.
2. Compute the breakeven point in sales dollars.
3. Find the new breakeven point in sales units if the fixed costs go up by $10,125.
4. Using the original figures, compute the breakeven point in sales units if the selling price decreases to $425 per unit, fixed costs go up by $15,200, and variable costs decrease by $15 per unit.