Knoll, inc. currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. knoll is considering increasing the price of its units to $60 per unit. if the price is changed, how many units will knoll need to sell for profit to remain the same as before the price change?

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Business

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11 September, 05:36

Knoll, inc. currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. knoll is considering increasing the price of its units to $60 per unit. if the price is changed, how many units will knoll need to sell for profit to remain the same as before the price change?

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Corinne Logan · Answer 1

Cost per unit

(300,000:15,000) + 20=40

Current profit

50*15,000-40*15,000=150,000

Profit change

60*15,000-40*15,000=300,000

units will knoll need to sell for profit to remain the same as before the price change is

(150,000+300,000) : 40=11,250