Question

Shock Electronics sells portable heaters for $29 per unit, and the variable cost to produce them is $19. Mr. Amps estimates that the fixed costs are $91,500. a. Compute the break-even point in units. Break-even point units b. Fill in the following table (in dollars) to illustrate that the break-even point has been achieved Sales Fixed costs Total variable costs Net profit (loss)

Answer 1

	Answer =A)
	CALCULATION OF CONTRIBUTION MARGIN
	PARTICULARS	AMOUNT
	Selling Price Per Unit=	$                           29
	Less: Variable Cost Per Unit	$                           19
	Contribution Margin Per Unit	$                           10
	CALCULATION OF THE BREAK EVEN POINT IN UNITS
	Break Even point =      Fixed Cost / Contribution Margin Per Unit
	Break Even point =
	Fixed Cost =	$                   91,500
	Divide By	"/" By
	Contribution Margin Per Unit =	$                           10
	Break Even point =	9150	Units
	Answer =B)
	Sales (9150 Units X $ 29)	265350
	Fixed Cost	91500
	total Varible costs	173850
	Net Profit (Loss)	0