The manager at the Yarn Factory changed the price of spools to increase sales

Accounting Feb 23, 2021

The manager at the Yarn Factory changed the price of spools to increase sales. The current price per unit is $13.85 per box of 500 spools; and, the forecasted lower price per unit to increase sales is $9.95 per box of 500 spools. If the variable expenses remain at $9.14 and the fixed expenses remain $3,400 how many units must be sold at the new price to breakeven?

Compute the contribution margin per unit using the old sales price. Next, compute the contribution margin per unit using the new sales price. Use the new unit contribution margin to compute breakeven sales in units. What is the breakeven sales in units?

A) 4,198 units

B) 4,272 units

C) 4,340 units

D) 4,440 units

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