If the price of Product E decreasing by 2% causes its quantity demanded to increase by 14% and the quantity demanded for Product
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Answer:
Break Even Point in Dollars = $6,000
Explanation:
Break Even Point in Dollars =
Selling price per unit.
Total Fixed Cost = Fixed Production cost + Fixed Selling Expenses
Fixed Production Cost = $3,000
Fixed Selling Expense = $1,500
Total Fixed cost = $3,000 +$1,500 = $4,500
Contribution per unit = Selling price - Variable Cost per unit
Selling Price Per Unit = $2.00
Variable Cost Per Unit = Variable Production cost + Sales commission
Variable Production cost = $0.30
Sales Commission Cost = $0.20
Variable Cost per unit = $0.30 + $0.20 = $0.50
Contribution per unit = $2.00 - $0.50 = $1.50
Break-even point =
Break Even Point in Dollars = $6,000