Question

Martin company incurred the following costs for 70,000 units: variable costs $420,000 fixed costs 392,000 martin has received a special order from a foreign company for 3,000 units. there is sufficient capacity to fill the order without jeopardizing regular sales. filling the order will require spending an additional $6,300 for shipping. if martin wants to break even on the order, what should the unit sales price be? $8.10 $11.60 $6.00 $13.70

Answer 1

The break-even point is where the company covers the costs used in producing the products.

$420,000 + $392,000 = $812,000 total cost / 70000 units = 11.6 cost per unit

3000 units ordered * 11.6 cost per unit = $34,800 + $6,300 = $41,100 / 3000 units = $13.70