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Breakeven point in dollars and units

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Carrier Company produces a part used in the small appliance industry. The company produces and sells 120,000 parts per year. The selling price is $4 per part; variable costs are $2.50 per part; fixed costs are $50,000 per year.

What is the breakeven point in dollars and units?

After conducting research, the president feels that a 5% reduction in the partâ??s selling price will result in a 20% increase in the number of parts sold. Prepare a CVP statement reflecting these changes.

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Solution Summary

The solution explains how to calculate the breakeven point in dollars and units and prepare a CVP statement

$2.19