I don't understand this question.

How much will profits increase for every unit sold over the break-even point?

This is all the information we have. I just don't get it.

Any unit sold over the break-even point is an increase. How do you find out how much of an increase?

Thanks in advance for the help. I appreciate it.

Michellerenee

commen sense would be the amount of units sold at the selling price

DaQuick

break even point is the point where you dont have profit or loss, so for whatever you sell over it is you profit, the price for what you sold it for is the amount of the profit

CaptainForest

I read your question and my answer differs than the other 2.

Example

Selling Price $100 per unit
Less: Variable Cost $40 per unit
Contribution Margin $60 per unit

Less: Fixed Costs $600,000

Therefore, Contribution Margin – Fixed Costs = Net Income or Net Loss.

In this example, the breakeven point is:
60x = 600,000
x = 10,000

So, for you to make NO profit or loss, but just to break even, you would need to sell 10,000 units.

Now, if you sell 1 more unit, your profit is equal to the contribution margin

You sell if for 100, yet the Variable Cost is 40, leaving you with 60 in profit. The fixed costs have already been attributed to the 10,000.

Therefore, all units sold above the break even point, their profit is equal to the Contribution Margin.

Michellerenee

I am so sorry for the way that I sounded, please forgive, I did not mean to demean.
I don't know what I was thinking, and I should have thought about my tone, I apoligize again, have a nice Easter! M.

pshiremath_21763

Here is the anwer:

For every unit sold over the break-even point, profit increases by an amount equal to Selling price minus variable cost. In other words the amount of increase in profit for every unit sold over break-even point, is equal to Contribution per unit (Selling price per unit - Variable cost per unit)

omsailogistic

I Don't Think You Need Any More Answers.

pree007

captainforest has best reply
good example forest