A company's fixed operating costs are $490,000, its variable costs are $2.85 per unit, and the...

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A company's fixed operating costs are $490,000, its variable costs are $2.85 per unit, and the...

A company's fixed operating costs are $490,000, its variable costs are $2.85 per unit, and the product's sales price is $4.50. What is the company's break-even point; that is, at what unit sales volume will its income equal its costs? Round your answer to the nearest whole number.

________ units

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Answer 1

Answer #1

Break-even point is point at which there would be no profit nor loss for company

Formula to calculate break-even point
Break-even point	Fixed costs/Contribution margin
Contribution margin	Selling price - Variable costs
Contribution margin	4.50-2.85
Contribution margin	$1.65

Break-even point	$490000/1.65
Break-even point	296,970

Thus, break even point is 296,970 units

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Answer 2

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A company's fixed operating costs are $490,000, its variable costs are $2.85 per unit, and the...

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Homework Answers

Add Answer to: A company's fixed operating costs are $490,000, its variable costs are $2.85 per unit, and the...

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