Following data: Fixed overheads: £40,000
Selling price: £6
Variable cost per unit: £4
If the selling price is increased by 50% then the break-even level would
now be: *
(1 Point)
8,000 units
20.000 units
O 10,000 units
0 12500 units​

If the selling price is increased by 50% then the break-even level would now be 8,000 units.

Explanation:

The following are given in the question:

Fixed overheads = £40,000

Initial selling price = $6

Variable cost per unit = £4

Percentage increase in selling price = 50%

Therefore, we have:

New selling price = Initial selling price * (100% + Percentage increase in selling price) = £6 * (100% + 50%) = £9

New contribution margin per unit = New selling price - Variable cost per unit = £9 - £4 = £5

New break-even level = Fixed overheads / New contribution margin per unit = £40,000 / £5 = 8,000 units

Therefore, if the selling price is increased by 50% then the break-even level would now be 8,000 units.

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