If a new product does not require any new fixed costs because the company utiliz

Question

If a new product does not require any new fixed costs because the company utilizes rhe exisiting capacity of facilities and personal, what would be th breakeven point? (Please answer the question in a paragraph by critical thinking) If a new product does not require any new fixed costs because the company utilizes rhe exisiting capacity of facilities and personal, what would be th breakeven point? (Please answer the question in a paragraph by critical thinking) (Please answer the question in a paragraph by critical thinking)

Explanation / Answer

Generally the formula for Break even point = Fixed costs / Contrbution per unit

Contribution per unit = selling price per unit - Variable costs per unit

Fixed costs are costs that must be paid whether or not any units are produced. These costs are "fixed" over a specified period of time or range of production.

Hence fixed costs for old product can be considered.

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