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I find it difficult in understanding and calculation of units produced? Could you please explain in a different way?
New contribution per unit = 75 – 21 – 10% x 2.1 = 51.9
Additional fixed costs = 0.5 (audit) + 0.8 (marketing) = $1.3m
Old contribution = 2m x (75 – 21) = $108m
To maintain profits, the new contribution must be old contribution plus enough to cover additional fixed costs = 109.3
Volume needed = 109.3m/51.9 = 2,105,973, an increase of 105,973 units.
HTH
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