What will be the breakeven sales volume in the next year (to the nearest unit)?

The marketing director of Peek Co has suggested that, despite an anticipated increase in variable cost per unit of $2, the selling price of the product manufactured by one of the divisions should be reduced by 3% to increase sales volume. The product is currently sold for $110 per unit which generates a contribution/sales ratio of 32%. Fixed costs for the next year are estimated to be $1,250,000.

What will be the breakeven sales volume in the next year (to the nearest unit)?
A . 41,806
B . 35,511
C . 39,062
D . 40,323

View Answer

Answer: A