Question

Rebotar Inc. makes basketballs. Their fixed costs are $3,450. Variable costs are $12 per basketball. If the basketball is priced at $25 and 300 basketballs are sold, did Rebotar break even? How do you know? Show all work.​

Answer 1

yes

Step-by-step explanation:

The contribution margin concept uses the formula below to calculate the break-even point.

break-even = fixed cost/ contribution margin per unit

fixed costs = $3,450.

contribution margin per unit = sales price - variable costs

= $25- $12

=$13

Break-even = $3,450 /$13

=265.38

=265 units

The break-even point is 265 units. Rebotar Inc. sold 300 basketballs; they meet the break-even point. 300 basketballs are more than 265.