Question - Breakeven Analysis
Techno designs produce head covers for golf clubs. The company expects to generate a profit next year. It anticipates fixed manufacturing costs of $126,500 and fixed general and administrative expense of $82,030 for the year. Variable manufacturing and selling costs per set of head covers will be $4.65 and $2.75, respectively. Each set will sell for $13.40
1. Compute the breakeven point in sales units.
2. Compute the breakeven points in sales dollars
3. If the selling price is increase to $14 per unit and fixed general and administrative expenses are cut $33,465, what will the new breakeven point be in units?
4. Prepare a graph to illustrate the breakeven point in 2.