Reynold's grocery has fixed costs of $251,000, the unit selling price is $22, and the unit variable costs are $21. what is the break-even sales (units) if the variable costs are decreased by $5?

a. 251,000 units

b. 11,952 units

c. 15,688 units

d. 41,833 units

Question

Business

Edwin Shelton

1 March, 03:49

Reynold's grocery has fixed costs of $251,000, the unit selling price is $22, and the unit variable costs are $21. what is the break-even sales (units) if the variable costs are decreased by $5?

a. 251,000 units

b. 11,952 units

c. 15,688 units

d. 41,833 units

+3

Answers (1)

Know the Answer?

Ingrid Alvarado · Answer 1

Fixed costs: $251,000

Unit selling price: $22

Unit variable costs: $21

Decrease in variable costs: $5

Break-even = fixed costs/contribution margin

Contribution margin = selling price - unit variable cost

Break-even = $251,000 / ($22-$21)

Break-even = $251,000

New break-even = fixed costs/[ (selling price) - (variable cost-decrease in variable cost) ]

New break-even = $251,000/[ ($22) - ($21-$5) ]

New break-even = $251,000/$22-$16)

New break-even = $251,000/$6

New break-even = $43,833 units

Reynold's grocery has fixed costs of $251,000, the unit selling price is $22, and the unit variable costs are $21. what is the break-even sales (units) if the variable costs are decreased by $5?a. 251,000 unitsb. 11,952 unitsc. 15,688 unitsd. 41,833 units

Reynold's grocery has fixed costs of $251,000, the unit selling price is $22, and the unit variable costs are $21. what is the break-even sales (units) if the variable costs are decreased by $5?

a. 251,000 units

b. 11,952 units

c. 15,688 units

d. 41,833 units