Problem: James Manufacturing company provides the following information about its cost structure:
Selling Price $20.00 per book
Variable cost per unit: $6.00
Fixed costs: 112000 per year
How many units must be sold to break-even?
Assume the variable cost and the price were both cut by $4.00 per unit. Which of the following would change?
Contribution margin per unit
Breakeven point in units
Total fixed costs
Contribution margin ratio