Answer:
Break-even point (units)= 10,345
Step-by-step explanation:
Giving the following information:
Fixed costs= $60,000
Variable costs= $1.20/unit
Selling price= $7
Because it is asking the cash break-even analysis, we will not include the depreciation expense. It is a cost but does not require a cash disbursement.
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 (units)= 60,000 / 7 - 1.2
Break-even point (units)= 10,345