Kumar produces large decorative tiles used in home decor The tiles sell for $720 and the fixed monthly operating costs are as follows Kumar 's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0 60 went to cover his fixed costs, and that...

b It will go down from 12 to 10 units By hit and trial method Sale Price a 720 Fixe ...

Kumar produces large decorative tiles used in home decor. The tiles sell for $720 and the fixed

Question:

Kumar produces large decorative tiles used in home decor. The tiles sell for $720 and the fixed monthly operating costs are as follows:
Kumar's accountant told him about ratios and he understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and that anything past that point was pure profit.
Kumar's is planning to increase the selling price to $840. What impact will the increase in selling price have on the breakeven point in units?
a. It will stay the same.
b. It will go down from 12 to 10 units.
c. It will go up from 10 to 13 units.
d. It will go down from 10 to 8 units.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...