Question

Jasper Corp. has a selling price of $44, and variable costs of $25 per unit. When 14,600 units are sold, profits equaled $133,000. How many units must be sold to break-even?

A. 19,000
B. 12,000
C. 14,333
D. 5,000

Answer 1

Break-even point in units= 7,600

Step-by-step explanation:

Giving the following information:

Selling price= $44

Unitary variable cost= $25

When 14,600 units are sold, profits equaled $133,000.

First, we need to calculate the total fixed costs:

Fixed costs= Total contribution margin - net income

Fixed costs= 14,600*(44 - 25) - 133,000

Fixed costs= $144,400

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= 144,400 / (44 - 25)

Break-even point in units= 7,600