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How does the reduction in fixed cost affect

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Reference no: EM132700273

Problem - Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of $9.85. Total fixed cost is $197,600.

Required -

Compute the break-even point in units.

Suppose that Kallard could reduce its fixed costs by $23,500 by reducing the amount of setup and engineering time needed. How many units must be sold to break even in this case?

How does the reduction in fixed cost affect the break-even point? Operating income? Margin of safety?

Reference no: EM132700273

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