Question: The fixed costs are $30,000,000, the variable cost per unit is $4.50, and there is no expected change in the cost per unit for changes

The fixed costs are $30,000,000, the variable cost per unit is $4.50, and there is no expected change in the cost per unit for changes in unit volume.

a) calculate the breakeven volume for GW at the current price of $19.99. Next, consider the relationship between price and break-even volume for GW:

b) What happens to break-even volume when a $5 price increase is made?

c) What about a $5 price decrease?

d) Find the difference in percentages of the breakeven change in volume for (b) and (c). Compare the percentage changes to unit volume changes that you calculated using BE analysis.

e) Write a single sentence summarizing your observations from this examination of the effect of a price increase.

f) From a breakeven analysis alone, does GW stand a better chance of breaking even from the price increase or the price decrease?

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