Question

The following information pertains to the flying fig​ corporation:

total units for information given 6000
fixed cost per unit $50
selling price per unit $375
variable costs per unit $150
target operating income $250,000
what is the breakeven in sales​ dollars?
A. 3,000 units
B. 2,000 units
C. 2,833 units
D. 833 units

Answer 1

To calculate the breakeven in sales dollars, use the formula (Fixed Costs + Target Operating Income) / Contribution Margin per Unit. None of the answer options provided match the calculated result.

Step-by-step explanation:

To calculate the breakeven in sales dollars, we need to determine the number of units that need to be sold in order to cover the fixed costs and variable costs. The formula to calculate breakeven in sales dollars is:

Breakeven in Sales Dollars = (Fixed Costs + Target Operating Income) / Contribution Margin per Unit

The contribution margin per unit can be calculated by subtracting the variable costs per unit from the selling price per unit. Using the information provided, the contribution margin per unit is $375 - $150 = $225.

Plugging in the values, we get:

Breakeven in Sales Dollars = ($50 + $250,000) / $225 = $1,112.22

Therefore, the breakeven in sales dollars is approximately $1,112.22. None of the answer options provided match this result, so the correct answer is not available.