Answer:
Break-even point in units= 2,292 units
Explanation:
Giving the following information:
Selling price= $120 per unit.
The company's fixed costs are $68,760
Variable cost per unit= $90
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 68,760/ (120 - 90)
Break-even point in units= 2,292 units
Answer:
Company's Break-even point in units is 2,292 units.
Explanation:
Break even point (in units) = Company Fixed Costs- Variable Costs
$68,760-30
=2292 units
Thus, break even point in units is 2,292.
Contribution margin per unit =Price Per Unit- Variable Cost Per Unit
= $120-$90
=$30 per unit
Sales revenue per unit of $120 less variable cost per unit of $90 would give contribution margin of $30 per unit. Fixed costs are given as $68,760 which is divided by contribution margin per unit of $30 which would give break even point of 2,292 units.
