Question

2) Business Zoom Corporation makes model cars. Each sells for $29.99. The unit cos

is $14.25. If the company's fixed costs are $314,800, find the number of units they
need to sell to break even.

Answer 1

20,000

Explanation:

29.99-14.25 (15.74) it the money that they make per unit without accounting for the fixed cost.

314800 = 15.74x Divide both sides by 15.74

20000 = x

Answer 2

Answer: Break-even point in units= 20,000

Explanation:

Break-even point in units= 20,000

Explanation:

Giving the following information:

Selling price per unit= $29.99

Unitary variable cost= $14.25

Fixed costs= $314,800

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 314,800 / (29.99 - 14.25)

Break-even point in units= 20,000