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Solve the following independent problems. Required: 1. Andromeda Company's break-even point is 2,400 units. Variable cost per unit is $42; total fixed costs are $67,200 per year. What price does Andromeda charge?

Answer :

Answer:

Selling price = $70 per unit

Explanation:

Given:

Break-even-point = 2,400 units

Variable cost = $42 per units

Fixed cost = $67,200 per year

Selling price = ?

Computation of contribution per unit:

Contribution per unit = Fixed cost / Break-even-point

Contribution per unit = $67,200 / 2,400

Contribution per unit = $28

Computation of Selling price:

Selling price = Contribution per unit + Variable cost

Selling price = $28 + $42

Selling price = $70 per unit

Therefore , price charge by Andromeda Company is $70 per unit

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