Question

Priya owns a small manufacturing operation and is reviewing her​ company's pricing strategy. She sees that her​ company's total variable expenses are​ $987,493 and its fixed expenses are​ $378,674. Her​ company's total revenue is​ $1,590,655. Suppose that​ Priya's company manufactures​ 84,000 units of the product. What is her​ company's breakeven selling​ price?

Answer 1

$16.26

Step-by-step explanation:

The break-even point is the level of sales at which the business incur no profit no loss.Fixed and variable costs are covered at this level of sales. Use following formula of break-even to calculate the fixed cost.

As we know that

Break-even price per unit = Variable cost per unit + Fixed cost per unit

Break-even price per unit = ($987,493/84,000) + ($378,674/84,000)

Break-even price per unit = $16.26 (Rounded to 2 decimal places )