Question

A maker of computer games expects to sell games at a price of per game. These units cost to produce.​ Selling, general, and administrative expenses are million and depreciation is . What is the EBIT​ break-even point for the number of games sold in this​ case?

Answer 1

$33,684 units

Step-by-step explanation:

Calculation to determine the EBIT break-even point for the number of games sold in this case

Using this formula

Units sold=(Selling, general, and administrative expenses+Depreciation)/(Price per game-Units cost)

Let plug in the formula

Units sold=($1,000,000+$280,000)/($48-$10)

Units sold = $1,280,000 / $38

Units sold= $33,684 units

Therefore the EBIT break-even point for the number of games sold in this case will be $33,684 units