Homework Clinic
Social Science Clinic => Accounting => Topic started by: ss2343 on Jan 5, 2020
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Management at the Trapper Company currently sells its products for $200 per unit and is contemplating a 50% increase in the selling price for the next year. Variable costs are currently 25% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will still pay the same variable cost per unit). Fixed expenses are $120,000 per year.
If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to break-even?
◦ 432 units
◦ 880 units
◦ 132,000 units
◦ 377 units
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432 units