66.7k views
1 vote
a manufacturer of games sell each copy for 21.95.the manufacturing cost of each copy is 14.92. monthly fixed cost is 8500. during the 1st month of sales of a new game,how many copies must be sold in order to get break-even(that is,in order that total revenue equal total cost)?

User ShdNx
by
9.0k points

1 Answer

4 votes

The break-even point is calculated as -

Break-even point (in units) = Fixed cost ÷ Contribution margin per unit

Here,

Selling price = $ 21.95

Variable cost (manufacturing costs) = $ 14.92 (since, costs bifurcation is not given, the manufacturing costs are taken as variable costs)

Contribution per unit = Selling price - Variable cost (manufacturing costs)

Contribution per unit = $ 7.03

Fixed cost (monthly) = $ 8500

Now,

Break-even point (in units) = $ 8,500 ÷ $ 7.03

Break-even point (in units) = 1,209.1 or 1210 games

User Se Won Jang
by
8.5k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories