Laguna Print makes advertising hangers that are placed on doorknobs. It charges

Question

Laguna Print makes advertising hangers that are placed on doorknobs. It charges $0.07 and estimates its variable cost to be $0.02 per hanger. Laguna's total fixed cost is $2,208 per month, which consists primarily of printer depreciation and rent. Suppose that the cost of paper has increased and Laguna's variable cost per unit increases to $0.054 per hanger. Calculate its new break-even point assuming this increase is not passed along to customers. (Round your intermediate calculations to 3 decimal places and final answer to the nearest whole number.) New Break-Even Hangers

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Selling price per unit                 0.070 Variable cost per unit                 0.054 Contribution per unit = .07 - .054                 0.016 Fixed costs           2,208.00 New break even = 2208/.016      138,000.00 Q2 Sales      180,000.00 Break even sales      123,200.00 Margin of safety = 180,000 - 123,200        56,800.00 MOS Ratio = (56800/180000) 31.56%

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