Problem: Company A is currently selling 500 units of a product per day at $10 per unit. Variable costs are $4 per unit.
(a) What is the unit breakeven sales level for a 15% price decrease? Show your work.
(b) Here is an incorrect answer to Part (a): 160 units. If this were the correct answer and if sales increased by 75 units per day as a result of the 15% price decrease, then calculate the change in profit that would result from this price change. Show your work.
(c) What is the unit breakeven sales level for a 10% price increase? Show your work.
(d) Describe clearly how a negative breakeven sales level should be interpreted.
(e) If sales decreased by 50 units per day as a result of the 10% price increase, then calculate the change in profit that would result from this price change. Show your work. I really need help understanding this.