Question

The following information pertains to the Flying Fig​ Corporation:Total Units for information given7 comma 000Fixed Cost per Unit$ 100Selling Price per Unit$ 500Variable Costs per Unit$ 175Target Operating Income$ 250 comma 000What is the breakeven in​ units? (Round your final calculation to the nearest​ unit.)

Answer 1

2,154 units

Step-by-step explanation:

Total units 7,000

Fixed cost per unit $100

variable costs per unit $175

selling price per unit $500

Break-even point under CVP analysis = fixed cost/contribution margin per unit.

Fixed cost for 7000 x $100 = $700,000

contribution margin per unit = selling price -variable cost

=$500 -$175

=$325

Break-even point in units = $700,000/$325

= 2, 153.84

=2,154 units