ReliableDelivery 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. Why are the break-even points different.
- The costs and selling price 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. How would you interpret this information?