Question

Your business of household products manufacturing is about to start a venture to producing self-squeezing mops with an initial budget of Php 8,500,000.00. To be competitive in the market, the board plans to sell one unit for only Php 600.00 with a computed variable cost for each of Php 237.00. How many units of the mops shall represent the breakeven point?

Answer 1

break-even point in units = 23,416 units (Approx.)

Explanation:

Given:

Initial budget of Php = 8,500,000

Sales price of Php = 600

Variable price of Php = 237

Find:

break-even point in units

Computation:

break-even point in units = Initial budget of Php / [Sales price of Php - Variable price of Php]

break-even point in units = 8,500,000 / [600 - 237]

break-even point in units = 8,500,000 / 363

break-even point in units = 23,415.978

break-even point in units = 23,416 units (Approx.)