Martin Company currently sells its products for $220 per unit

Accounting Feb 23, 2021

Martin Company currently sells its products for $220 per unit. Management is contemplating a 20% increase in the selling price for the next year. Variable costs are currently 40% of sales revenue and are not expected to change next year. Fixed expenses are $120,000 per year.

If fixed costs increase 10% next year, and the new selling price per unit goes into effect, how many units will need to be sold to breakeven?

A) 750 units

B) 1,000 units

C) 132,000 units

D) 375 units

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