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Expert-verified Found in: Page 1105 ### Horngren'S Financial And Managerial Accounting

Book edition 6th
Author(s) Tracie L. Miller-Nobles, Brenda L. Mattison
Pages 992 pages
ISBN 9780134486833

# A furniture manufacturer specializes in wood tables. The tables sell for $100 per unit and incur$40 per unit in variable costs. The company has $6,000 in fixed costs per month. Calculate the breakeven point in units under each independent scenario. 14. Variable costs increase by$10 per unit. 15. Fixed costs decrease by $600. 16. Sales price increases by 10%. 14.120 Units 15. 90 Units 16. 86 Units See the step by step solution ### Step by Step Solution ## Calculation of breakeven point in units if variable costs increase by$10 per unit

Required sales in units = Fixed costs + Target profit/ Contribution margin per unit

=$6,000+$0/($100-$50)

=120 units

## Calculation of breakeven point in units if fixed costs decrease by $600 Required sales in units = New Fixed costs + Target profit/ Contribution margin per unit =($6,000-$600)+$0/($100-$40)

=$5,400/$60

=90 units

## Calculation of breakeven point in units if sales price increase by 10%

New Sales Price = Existing Price (1+Increase in sales Price)

=$100(1+0.1) =$110

Required sales in units = Fixed costs / Contribution margin per unit

=$6,000/($110-\$40)

= 86 Units ### Want to see more solutions like these? 