Question

The Muffin House produces and sells a variety of muffins. The selling price per dozen is $20, variable costs are $14 per dozen, and total fixed costs are $3600. How many dozen muffins must The Muffin House sell to breakeven?

Answer 1

Break-even point= 600 units

Step-by-step explanation:

Giving the following information:

The selling price per dozen is $20, variable costs are $14 per dozen, and total fixed costs are $3600.

The break-even point in units is the number of units required to cover for the fixed costs. We need to use the following formula to calculate it:

Break-even point= fixed costs/ contribution margin

Break-even point= 3,600/ (20 - 14)= 600 units