Question

What is the breakeven point, in dollars, for Zippy Dippy Swimwear, maker of bathing suits and accessories. They have the following costs:

raw materials: $15 per pair
labor costs: $8 per pair
commissions: $2 per pair
utilities: $50,000
rent: $96,000
taxes: $30,000
salaries: $150,000

Answer 1

the selling is missing, so I looked for similar questions and found that the selling price per swimsuit and its accessory is $85.

total variable costs:

• raw materials $15
• labor costs $8
• commissions $2
• total $25

total fixed costs:

• utilities $50,000
• rent $96,000
• salaries $150,000
• taxes $30,000
• total $326,000

contribution margin per swimsuit and accessory =$85 - $25 = $60

break even point in units = $326,000 / $60 = 5,433.33 ≈ 5,434 units

break even point in $ = 5,434 x $85 = $461,890