In 2008, Micdougal sold 3,000 units at $500 each. Variable expenses were $350 pe

Question

In 2008, Micdougal sold 3,000 units at $500 each. Variable expenses were $350 per unit and fixed expenses were $195,000. The same variable expenses per unit and fixed expenses are expected for 2009. If Micdougal cuts selling price by 4%, what is Micdougal's break-even point in units for 2009? Question 18 options: 1300 1354 1500 1444 In 2008, Micdougal sold 3,000 units at $500 each. Variable expenses were $350 per unit and fixed expenses were $195,000. The same variable expenses per unit and fixed expenses are expected for 2009. If Micdougal cuts selling price by 4%, what is Micdougal's break-even point in units for 2009? In 2008, Micdougal sold 3,000 units at $500 each. Variable expenses were $350 per unit and fixed expenses were $195,000. The same variable expenses per unit and fixed expenses are expected for 2009. If Micdougal cuts selling price by 4%, what is Micdougal's break-even point in units for 2009? 1300 1354 1500 1444 1300 1354 1500 1444 1300 1354 1500 1444

Explanation / Answer

New selling price = $500 - $500 * 4% = $500 - $20 = $480

New break even point =

($480 - $350) * BEP =$195,000

BEP = $195,000 / $130 = 1,500 units

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