Final answer:
The sales volume required to break even in this business is $100,000.
Step-by-step explanation:
To calculate the sales volume required to break even, we need to consider the fixed costs and the cost of goods sold.
Fixed costs are the expenses that remain constant regardless of the sales volume. In this case, the fixed costs are $100,000.
The cost of goods sold is 50% of the sale price, which means it is half of the revenue generated from selling each unit.
To break even, the revenue must be equal to the fixed costs plus the cost of goods sold multiplied by the sales volume.
Let's represent the sales volume as 'x'.
Equation: Revenue = Fixed Costs + (Cost of Goods Sold * x)
Since the cost of goods sold is 50% of the sale price, we can say that the revenue is 2 times the cost of goods sold.
Equation: 2 * Cost of Goods Sold * x = Fixed Costs
Replacing the given values, we get: 2 * 0.5 * x = $100,000
Simplifying the equation, we have: x = $100,000 / 1
Therefore, the sales volume required to break even is $100,000.