Assume the sales price is $10 per unit, variable cost is $5 per unit, and fixed cost is $1,000. How would the break-even point in units change if the variable cost increased to $8 per unit?

it would increase by 300 units

Explanation:

Breakeven quantity are the number of  units produced and sold at which net income is zero

Breakeven quantity = fixed cost / price – variable cost per unit

Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments

If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.  

Hourly wage costs and payments for production inputs are variable costs

Variable costs are costs that vary with production

If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.

Initial breakeven = 1000 / (10 - 5) = 200

New breakeven = 1000 /(10 - 8) = 500

Change in breakeven = 500 - 200 = 300

Change in break-even point = 300 units

Explanation:

Given:

Sales price = $10 per unit

Variable cost = $5 per unit

Fixed cost = $1,000

Find;

Change in break-even point in units when variable cost increased to $8 per unit

Computation:

Break-even point = Fixed cost / [sales - VC]

Actual break-even point = 1,000 / [10 - 5]

Actual break-even point = 200 units

New break-even point = 1,000 / [10 - 8]

New break-even point = 500 units

Change in break-even point = 500 - 200

Change in break-even point = 300 units

​participate in networking opportunities that allow you to get to know potential clients, other entrepreneurs, influential people in your community, etc. focus on doing everything you can to cultivate posting word of mouth advertisin