Question

Becky, an artist, plans to paint and sell some miniature paintings. She just bought some brushes for $1, and paint and canvas for each painting costs $21; she will sell each painting for $22. Once Becky sells a certain number of her paintings, she will be breaking even. How much will Becky have earned? How many paintings will that be?

Answer 1

After one unit is sold, Becky will break-even.

Explanation:

Giving the following information:

Fixed costs= $1

Unitary variable cost= $21

Selling price= $22

The break-even point is the number of units required to cover the fixed costs after deducting from the selling price the variable components. At this point, net income is zero.

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 1 / (22 - 21)

Break-even point in units= 1

After one unit is sold, Becky will break-even.