Question

braile gear works sells a single gear for a price of $57.00 per unit. the variable costs of the gear are $25.00 per gear and annual fixed costs are $459,200. required: what is the break-even level of annual sales for braile gear works?iate calculations.

Answer 1

The break-even level of annual sales for Braile Gear Works is 14,350 units, which is calculated by dividing the fixed costs by the difference between the price per unit and the variable costs per unit.

Step-by-step explanation:

To calculate the break-even level of annual sales for Braile Gear Works, you can use the formula:

Break-even Point (units) = Fixed Costs ÷ (Price per Unit − Variable Costs per Unit)

Given that Braile Gear Works has fixed costs of $459,200, sells each gear for $57.00, and the variable costs are $25.00 per gear, the break-even level of annual sales in units would be:

Break-even Point (units) = $459,200 ÷ ($57.00 − $25.00) = $459,200 ÷ $32.00 = 14,350 units.

Therefore, Braile Gear Works needs to sell 14,350 gears annually to break even.