Question

MC Qu. 129 Alvarez Companys break-even point in units... Alvarez Company's break-even point in units is 1,100. The sales price per unit is $14 and variable cost per unit is $9. If the company sells 2,700 units, what will net income be

Answer 1

$8,000

Step-by-step explanation:

At the break-even point, revenue equals expenses. With the given data at the break-even point, it is possible to find the company's fixed costs:

`Revenue = Costs\\1,100*\$14 = 1,100*\$9 +FC\\FC = \$5,500`

The net income at 2,700 units sold is given by:

`N(2,700) = (\$14-\$9)*2,700 - \$5,500\\N(2,700) = \$8,000`

The net income will be $8,000.