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Company is considering a modification to one of its main products that would make it more attractive to customers. As a result, X Company could increase the price with no decrease in unit sales. Currently, financial information for this product is as follows:

Selling price $10.24
Variable costs $3.64
Fixed costs $10,990

The modification would not result in additional variable costs, but fixed costs would increase to $14,390. Assuming that X Company could increase the selling price by $2.30, at what unit sales level would it be indifferent between modifying the product and not modifying it?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9977665

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