Question

Sparkle Jewelry sells 800800 units resulting in $ 85 comma 000$85,000 of sales​ revenue, $ 28 comma 000$28,000 of variable​ costs, and $ 22 comma 000$22,000 of fixed costs. Breakeven point in units is​ ________. (Round to the nearest whole​ unit.)

Answer 1

309 unit

Step-by-step explanation:

Sale volume = 800 units

Sales​ revenue = $85,000

Variable​ Costs = $28,000

Fixed Costs = $22,000

Sales Price per unit = $85,000 / 800 = $106.25

Variable cost per unit = $28,000 / 800 = $35

Contribution per unit = 106.25 -35 = $71.25

Break-even point in units = Fixed cost / Contribution per unit

Break-even point in units = $22,000 / 71.25

Break-even point in units = 308.77 = 309 units

Answer 2

Step-by-step explanation:

Breakeven point = Fixed costs/Contribution margin

Contribution margin in units =Selling price per unit - Variable cost per unit

Selling price per unit = $85,000/800 = $106.25

Variable cost per unit = $28,000/800 = $35

Contribution margin = 106.25 - 35 = 71.25

Breakeven point = 22,000/71.25 = 309 units