A ceramics manufacturer sold cups last year for $7.50 each. The variable cost of manufacturing was $2.25 per unit. The company needed to sell 20,000 cups to break even. Its net income was $5,040. This year, the company expects the price per cup to be $9.00; the variable manufacturing cost to increase by 33.3%; and the fixed costs to increase by 10%. How many cups (rounded) does the company need to sell this year to break even?
A ceramics manufacturer sold cups last year for $7.50 each. The variable cost of manufacturing was $2.25 per unit. The company needed to sell 20,000 cups to break even. Its net income was $5,040. This year, the company expects the price per cup to be $9.00; the variable manufacturing cost to increase by 33.3%; and the fixed costs to increase by 10%. How many cups (rounded) does the company need to sell this year to break even?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...
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![A ceramics manufacturer sold cups last year for $7.50 each. The variable cost of manufacturing was $2.25 per
unit. The company needed to sell 20,000 cups to break even. Its net income was $5,040. This year, the
company expects the price per cup to be $9.00; the variable manufacturing cost to increase by 33.3%; and the
fixed costs to increase by 10%. How many cups (rounded) does the company need to sell this year to break
even?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8642e14-9317-4706-8b2f-9b030839e1d9%2F0283fb7f-1e28-4ba3-b203-5b8053570e6e%2Fnx7mt7l_processed.png&w=3840&q=75)
Transcribed Image Text:A ceramics manufacturer sold cups last year for $7.50 each. The variable cost of manufacturing was $2.25 per
unit. The company needed to sell 20,000 cups to break even. Its net income was $5,040. This year, the
company expects the price per cup to be $9.00; the variable manufacturing cost to increase by 33.3%; and the
fixed costs to increase by 10%. How many cups (rounded) does the company need to sell this year to break
even?
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