Question

Use the following information to determine the break-even point in units (rounded to the nearest whole unit): Unit sales 58,000 Units Unit selling price $14.90 Unit variable cost $8.30 Fixed costs $194,000

Answer 1

29,394 units

Step-by-step explanation:

The formula for break even point is given as Fixed cost / Contribution margin.

Where;

Contribution margin = Sales per unit - Variable cost per unit

Given that ;

Fixed cost = $194,000

Unit selling price = $14.90

Unit variable cost = $8.30

Therefore;

BEP(units) = $194,000 / $14.90 - $8.30

= $194,000 / $6.6

= 29,394 units