Question

Achonwa Cutting is opening a new line of scissors for supermarket distribution. It estimates its fixed cost to be $550.00 and its variable cost to be $0.55 per unit. Selling price is expected to average 50.80 per unit. For Achonwa Cutting, the break-even point in units = units (enter your response as a whole number). For Smithson Cutting, the break-even point in units = units (enter your response as a whole number).

Answer 1

The break-even point can be calculated using the formula: Break-even point in units = Fixed costs / (Selling price - Variable cost). The break-even point for Achonwa Cutting is 11 units.

Step-by-step explanation:

To calculate the break-even point, we need to determine the number of units that need to be sold in order to cover the fixed and variable costs. The break-even point can be calculated using the formula:

Break-even point in units = Fixed costs / (Selling price - Variable cost)

For Achonwa Cutting, the fixed cost is $550, the variable cost is $0.55 per unit, and the selling price is $50.80 per unit. Plugging these values into the formula, we get:

Break-even point in units = 550 / (50.80 - 0.55) = 11 units

Therefore, the break-even point for Achonwa Cutting is 11 units.