Question

Alvarez Company's break-even point in units is 1,400. The sales price per unit is $19 and variable cost per unit is $15. If the company sells 3,300 units, what will net income be

Answer 1

The net income is "$7600".

Step-by-step explanation:

The given values are:

Selling Price

= $19

Variable Cost

= $15

Company sells

= 3,300 units

Per unit contribution

= $4

Now,

The total contribution will be:

=
`3300* 4`

=
`13200`

⇒ Break Even Point =
`(Fixed \ cost)/(Contribution \ per \ unit)`

`1400=(Fixed \ cost)/(4)`

`Fixed \ Cost=1400* 4`

`=5600`

Now,

Calculation of the net income will be:

= Contribution - Fixed cost

=
`13200-5600`

=
`7600` (4)