If the variable costs per unit were to decrease to $15.40 per unit, fixed costs increase to $992,800, and the selling price does not change, break-even point in units would: 68,093.2 Units
Solution:
The point of divergence is the manufacturing stage where production costs are equal to commodity sales. Investment is supposed to achieve a breakthrough if the market price of an asset is identical to its original cost.
New Break-even Point
= New Fixed Cost/(Selling Price - New Variable Cost)
= [tex]\frac{(992,800)}{30 - 15.40}[/tex]
= [tex]\frac{(992,800)}{14.58}[/tex]
= 68,093.2 Units
