Question

RST compay produces a product that has a variable cost of $6 per unit. The companys fixed costs are $30,000. the product sells for $10 per unit. how many units muct be produced to break even

Answer 1

7,500 units

Step-by-step explanation:

The break-even point is the point in which the earnings and the costs are the same and there is no gain or loss. The formula to calculate the break-even point in units is:

Break-even point in units= Fixed Costs/(Sales price per unit – Variable costs per unit)

Now you have to replace the values given to find units that have to be produced to break even:

Break-even point in units=30,000/(10-6)

Break-even point in units=30,000/4

Break-even point in units=7,500

The answer is that the units that have to be produced to break even are 7,500.