Using the following data, answer the questions below:
Price per unit (P) = $2
Quantity produced (Q) = 12,000
Variable cost per unit (VC) = $0.50
Fixed cost (FC) = $14,000
What is the total profit?
What is the average cost per unit?
What is the breakeven quantity (round up to the nearest whole unit)?
If variable cost increases to $0.70, by how much will profit decrease (compared to your answer in part A)?
If the variable cost increases to $0.70, what is the unit contribution margin?