ABC Corporation produces and sells a single product. The company has fixed expenses of $500,000 per year, a selling price per unit of $50, and variable expenses per unit of $25. The company's breakeven point is 20,000 units. ABC Corporation is considering the addition of a new product line that will require an additional $200,000 in fixed expenses per year and will have a selling price per unit of $60 and variable expenses per unit of $35.

Required:

a) Calculate the breakeven point in units and dollars for the new product line.

b) Calculate the total number of units ABC Corporation needs to sell in order to breakeven with both the existing and the new product lines.

c) Calculate the profit or loss ABC Corporation would earn by selling 25,000 units of the existing product and 15,000 units of the new product line.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a The breakeven point for the new product line can be calculated as follows Contribution ... View the full answer