Question

For Oriole Company, sales is $1500000, fixed expenses are $330000, and the contribution margin per unit is $60. What is the break-even point?

Answer 1

5500

Step-by-step explanation:

Breakeven quantity are the number of units produced and sold at which net income is zero.

Breakeven is the ratio of fixed cost to profit per unit of output sold.

Breakeven quantity = fixed cost / price – variable cost per unit

= fixed price / contribution margin per unit

Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments

Variable costs are costs that vary with production

If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.

$330,000 / $60 = 5500