Question

Use the following information to determine the break-even point in units (rounded to the nearest whole unit):
Unit sales 59,000 Units
Unit selling price $14.95
Unit variable cost $8.40
Fixed costs $195,000

Answer 1

Answer:

29,771 units

Explanation:

The break-even indicates the number of units that you have to sell to cover your costs. The break-even point is calculated by using the formula:

Break-even point in units= Fixed costs/(selling price per unit-variable cost per unit)

Break-even point in units= $195,000/($14.95-$8.40)

Break-even point in units= $195,000/$6.55

Break-even point in units= 29,771 units

The break-even point in units is 29,771.