Question

Big Chill, Inc. sells portable dehumidifier units at the current price of $184. Unit variable costs are $85. Fixed costs, made up primarily of salaries, rent, insurance and advertising, are $3,236,000. Calculate breakeven sales for Big Chill, Inc. Round your answer to the nearest whole number.

Answer 1

Answer:

$6,014,384

Explanation:

Break even point is the level at which a firm makes neither profit nor a loss. This is the point where Profit = $0.

Break even units = Fixed Costs ÷ Contribution per unit

therefore,

Break even units = $3,236,000 ÷ ($184 x  $85)

                              = 32,687 units

thus,

Breakeven Sales = 32,687 units x $184 =  $6,014,384