Michael Vick has written a self improvement book that has the following cost characteristics:
- Selling Price $16.00 per book
- Variable cost per unit:
- Production $4.00
- Selling & administrative 2.00
- Fixed costs:
- Production $88,000 per year
Assume the variable production cost and the price were both cut by $2.00 per unit. Which of the following would change?
- Breakeven point in units
- Contribution margin ratio
- Total fixed costs
- Contribution margin per unit