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Scenario
Reliable delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Compute the break-even point in both sales dollars and units under each of the following independent assumptions. Comment on why the break-even points are different.
The costs and selling prices are as just given.
Fixed costs are increased to $75,000
Selling price is increased by 10%. (fixed costs are $60,000)
Variable cost is increased to $4.50 per unit. (fixed costs are $60,000 and selling price is $9.)
Show the analysis in a table format. Write one paragraph interpretation of the information.
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