Kennedy Company produces a product that sells for $37 per unit and has a variable cost of

Question:

Kennedy Company produces a product that sells for $37 per unit and has a variable cost of $22 per unit. Kennedy incurs annual fixed costs of $75,000.
Required
a. Determine the sales volume in units and dollars required to break even.
b. Calculate the break-even point assuming fixed costs increase to $120,000.
c. Explain how a fixed cost structure affects risk and the break-even point.