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The Suit Emporium carries brand name business attire

Accounting

The Suit Emporium carries brand name business attire. Each suit sells for the set price of $99.99. The variable cost per suit is $61.24 and the contribution margin is $38.75. The fixed expenses at Suit Emporium are $16,600. A new business apparel outlet has opened fifteen miles from the emporium's location and sales have decreased because local completion offers consumers similar products at lower price per unit. As a result of this decrease, the management at Suit Emporium is considering reducing the sales price per unit to attract the consumer base back to the emporium. The forecasted price per unit is $79.99.

1.     What is the unit contribution margin using the forecasted sales price?

2.     What is the new breakeven point in units?

A) $18.75; 886 units

B) $28.50; 1,022 units

C) $22.25; 560 units

D) $15.65; 730 units

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