a firm has fixed expences totaling $40,000 and production cost for each unit totaling 17.00. Testing...
a firm has fixed expences totaling $40,000 and production cost for each unit totaling 17.00. Testing a selling price of $25,00 how many units must be sold in order to break even.
Homework Answers
Answer:
Fixed Cost = $40,000
Unit Selling Price = $25.00
Unit Variable Cost = $17.00
Unit Contribution Margin = Unit Selling Price - Unit Variable
Cost
Unit Contribution Margin = $25.00 - $17.00
Unit Contribution Margin = $8.00
Break Even Point (Units) = Fixed Cost / Unit Contribution
Margin
Break Even Point (Units) = $40,000 / $8.00
Break Even Point (Units) = 5,000 Units
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