Morse Company manufactures a product that sells for $200 per unit. It incurs fixed costs of $840,000.

Question:

Morse Company manufactures a product that sells for $200 per unit. It incurs fixed costs of $840,000.
Variable cost for its product is $80 per unit.
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 $960,000.
c. Explain how a fixed cost structure affects risk and the break-even point.