The fixed cost for a firm drop by 25%. Prior to this breakthrough fixed cost were $100,000 and unit contribution maegin was and remains at 5.00. The new amount of break-even units will be: Thank You Very Much! ps: I got two answer
Some information appears to be missing here. As I read your question, the original cost function was C=100,000 + 5.*Q. The new cost function is 75,000 + 5.*Q Now, to get the break-even Q, you need to know something about price (or marginal revenue).
To calculate the break-even units, you need to determine the quantity at which the total revenue equals the total cost. However, without any information regarding the price or marginal revenue, it is not possible to calculate the specific break-even point.
To find the break-even point, you typically use the formula:
Break-even point (in units) = Fixed costs / Contribution margin per unit
In this case, the contribution margin per unit remains at $5.00. However, without information about price or marginal revenue, we cannot determine the break-even point accurately.
If you have the price per unit or any additional information, I would be happy to help you calculate the break-even point.