Question

A company manufactures and sells a product for $190 per unit. The company's fixed costs are $110,000, and its variable costs are $95 per unit. The company's break-even point in sales dollars is: (Round your intermediate calculations to two decimal places.)

Answer 1

The break-even point in sales dollars for the company is $220,000.80.

Step-by-step explanation:

To calculate the break-even point in sales dollars, we need to determine the number of units we need to sell in order to cover the fixed costs. The formula for break-even point is:

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

Plugging in the values from the question:

Break-even point (in units) = $110,000 / ($190 - $95)

Break-even point (in units) = $110,000 / $95

Break-even point (in units) = 1158.42

To convert this into sales dollars, we multiply the break-even point by the selling price per unit:

Break-even point (in sales dollars) = 1158.42 * $190

Break-even point (in sales dollars) = $220,000.80