Question

Waterway Industries has fixed costs of $15,000 per year. Its warehouse sells wine with variable costs of 70% of its unit selling price. How much in sales does Waterway need to break even per year?

Answer 1

50000 units sale per dollar price of the wine

Explanation:

Fixed cost per year = $15,000

Variable cost per bottle of wine = 70% of selling price

To break even, the profits from the number of units sold = $15,000

(30% of selling price)× X units =$15,000

Or 15,000÷0.3 =50000 units per dollar price of wine