Grand Gimmicks Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to $190 per unit. Assume that the cost of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. At the proposed increased selling price of $190 per unit, what dollar volume of sales per month is required to break-even? (Rounded)

Break Even Sales Volume in Dollars=  $ 19500

Explanation:

Break Even Sales Volume in Dollars= Fixed Costs/ Contribution Margin Ratio

Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)

Break Even Sales Volume in Units = Fixed Costs/ Contribution Margin per Unit

Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)

Break Even Sales Volume in Dollars= $6,240/1-(130/190)

Break Even Sales Volume in Dollars= $6,240/1-0.68

Break Even Sales Volume in Dollars= $6,240/0.32

Break Even Sales Volume in Dollars= $ 19500

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