Question

Use the following information to determine the break-even point in units (rounded to the nearest whole unit):

Unit sales: 49,000 Units
Unit selling price: $15.05
Unit variable cost: $8.60
Fixed costs: $185,000
a. 17,300
b. 16,100
c. 18,500
d. 15,800

Answer 1

Using the formula Fixed Costs ÷ (Unit Selling Price - Unit Variable Cost), and the given fixed costs of $185,000, a unit selling price of $15.05, and a unit variable cost of $8.60, the break-even point in units is approximately 28,682 units after rounding to the nearest whole unit.

Step-by-step explanation:

To determine the break-even point in units, we need to calculate when total revenues are equal to total costs (fixed costs plus variable costs). The formula for the break-even point in units is Fixed Costs ÷ (Unit Selling Price - Unit Variable Cost).

Using the information given:

• Fixed Costs = $185,000
• Unit Selling Price = $15.05
• Unit Variable Cost = $8.60

Now, let's calculate the break-even point:

Break-even point in units = $185,000 ÷ ($15.05 - $8.60) = $185,000 ÷ $6.45

Break-even point in units = 28,682.17 units

Since we need to round to the nearest whole unit, the break-even point is approximately 28,682 units.