If fanning corporation sells products for $26 each that have variable costs of $12 per unit The break-even point in units and dollars is = 678695.6522.
A breakeven point is used in more than one regions of commercial enterprise and finance. In accounting terms, it refers to the manufacturing stage at which total production revenue equals total production prices. In investing, the breakeven point is the factor at which the unique price equals the marketplace charge. meanwhile, the breakeven point in options trading takes place while the marketplace charge of an underlying asset reaches the level at which a consumer will no longer incur a loss.
Break-even point = Total fixed cost /Contribution per unit
Contribution per unit = Selling priced - variable cost
= 26 -12
= 14
Break even point in dollar = Total fixed coxt / Contribution ratio
Contribution ratio = Contribution / selling price
= 12/26
= 46%
Break even point in dollar = 312,200/46%
= 678695.6522
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