Questions: For 20 × 2 the selling price per lamp will be 45.00. If the fixed cost increase by 70,000.00 how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed)

For 20 × 2 the selling price per lamp will be 45.00. If the fixed cost increase by 70,000.00 how many lamps must be sold to breakeven?

Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed)

Transcript text: For $20 \times 2$ the selling price per lamp will be $\$ 45.00$. If the fixed cost increase by $\$ 70,000.00$ how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) $\square$

Solution

Solution Steps

Step 1: Determine Total Fixed Costs

The total fixed costs are calculated by adding the initial fixed costs and the increase in fixed costs: \[ \text{Total Fixed Costs} = 70000 + 70000 = 140000 \]

Step 2: Identify Selling Price and Variable Cost

The selling price per lamp is given as $ \$ 45.00 $. The variable cost per lamp is calculated as: \[ \text{Variable Cost per Unit} = 20 \times 2 = 40 \]

Step 3: Calculate Breakeven Point in Units

The breakeven point in units is determined using the formula: \[ \text{Breakeven Point (units)} = \frac{\text{Total Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}} \] Substituting the values: \[ \text{Breakeven Point (units)} = \frac{140000}{45 - 40} = \frac{140000}{5} = 28000 \]

Step 4: Round Up to the Nearest Whole Unit

Since we cannot sell a fraction of a unit, we round up to the nearest whole number, which remains $ 28000 $.