Accounting

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For the past year, Hornbostel Company had fixed costs of $6,552,000, a unit variable cost of $444, and a unit selling price of $600. For the coming year, no changes are expected in revenues and costs, except that a new wage contract will increase variable costs by $6 per unit. Determine the break-even sales (units) for the following:
a. Past year units
b. Coming year units

  • Accounting -

    Past year units
    6552000/(600-444) = 42000 units
    Coming year units
    655200/ (600-450) = 43680 units

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