Question

Boren Company reported the following information for the current year: Sales (625 units) $37,800, direct materials and direct labor $14,600, other variable costs $13,200, and fixed costs $6,000. "What is the company's break-even point in units?"

Answer 1

Break-even point in units= 375 units

Step-by-step explanation:

Giving the following information:

Sales (625 units) $37,800

direct materials and direct labor $14,600

other variable costs $13,200

fixed costs $6,000.

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

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

Unitary selling price= 37,800/625= $60.48

Unitary varaible cost= (13,200 + 14,600)/625= $44.48

Break-even point in units= 6,000/ (60.48 - 44.48)

Break-even point in units= 375 units