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Financial Unit Breakeven Calculation

Jones Co. has a new design for their product June next round that can reduce their material cost of producing units from $8.13 to $7.32. Jones passes on half of all cost savings by cutting the current price to customers. For simplicity:

- Use current labor costs of $4.06
- Assume all period costs will remain the same (see attachment)

Determine how many units (000) of product June would need to be sold next round to break even on the product.

Select 1:

a. 1,435 units.
b. 1,169 units.
c. 1,045 units.
d. 1,304 units.
e. 883 units.
f. 1,104 units.

See additional attachments, not sure if you need them.


Solution Preview

We need to refer to the spreadsheet.

The saving in material cost = 8.13-7.32 = ...

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