Question

16) (2 marks)

Fixed Costs = £12,000 Variable Cost per unit = £18
Selling price per unit = £88
How many products do we need to sell to break even?

Answer 1

171 units

Step-by-step explanation:

Break-even point = fixed cost / Divide by contribution margin per unit.

fixed costs = £12,000

Contribution margin per unit = selling price - variable cost per unit

Selling price £88: variable cost £18

contribution margin per unit

= £88 - £18

=£70

Break-even point = £12,000/£70

=171.42

=171 units