Question

The following data are available for product no. CK74, manufactured and sold by Ruby Corporation:Maximum capacity with present facilities 11,000 unitsTotal fixed cost (per period) $ 851,400Variable cost per unit $ 120.00Sales price per unit $ 186.0010. Required informationThe number of units of CK74 that Ruby must sell to break- even is:a. 12,900.b. 4,577.c. 7,095.d. 6,050.

Answer 1

Break-even point in units= 12,900 units

Step-by-step explanation:

Giving the following information:

Total fixed cost (per period) $ 851,400

Variable cost per unit $ 120

Sales price per unit $ 186

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 851,400 / (186 - 120)

Break-even point in units= 12,900 units