Wang Company produces a product that sells for $125 per unit and has a variable cost of

Question:

Wang Company produces a product that sells for $125 per unit and has a variable cost of $75 per unit. Wang incurs annual fixed costs of $450,000.

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 $600,000.
c. Explain how a fixed cost structure affects risk and the break-even point.