Question

If Piper Manufacturing manufactures one unique set of stack pipes, and the sell price is $121,000, the variable costs per unit are $62,000, and the fixed costs are $500,000, what is the break-even point in units

Answer 1

Answer:

8.47

Explanation:

The formula to calculate the break-even point in units is:

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

Fixed costs= $500.000

Selling price per unit= $121,000

Variable cost per unit= $62,000

Break-even point in units=$500,000/($121,000-$62,000)

Break-even point in units=$500,000/59,000

Break-even point in units=8.47

According to this, the break-even point in units is 8.47.