Question

Skyline Corp has a selling price of $25 per unit, variable costs of $20 per unit, and fixed costs of $25,000. What sales revenue is needed to break-even?

Answer 1

$125,000

Step-by-step explanation:

Breakeven is the point where sales is equal to cost. As such, it is the point where a business neither makes a net profit nor a net loss.

Let the number of units sold to breakeven be Y

25Y = 20Y + 25000

25Y - 20Y = 25000

5Y = 25000

Y = 5000 units.

Sales revenue needed to break even

= 5000 × $25

= $125,000