Holly's ham, inc. sells hams during the major holiday seasons. during the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs. breakeven point in units is:
To find: Breakeven point (in units) Given: Number of hams sold = 11000 Sales revenue = $220,000 Variable cost = $55,000 Fixed cost = $24,000 Solution: Break-even point (in units) can be calculated as:- Fixed costs / (sales price per unit-variable costs per unit) Fixed costs = $24,000 Sales price per unit = total sales revenue/number of units = 220000/11000 = $20 Variable costs per unit = total variable cost/number of units = 55000/11000 = $5 Putting values in the formula, =24000 / (20-5) =24000/15 =1600 Breakeven point (in units) = 1600 units
