Following is the information of a product of a firm: Selling price per unit = $50...
Following is the information of a product of a firm:
Selling price per unit = $50
Variable expenses per unit = $20
Fixed expenses per month = $30,000
Desired operating income = $15,000
The breakeven point volume in units is ??
The volume necessary to earn the desired operating income is
??
{Please show calculations. I can't for the life of me figure
this out! TIA!}
Homework Answers
Contribution margin per unit
= Selling price per unit - Variable costs per unit
= 50 - 20
= 30 per unit.
A)
Breakeven point in volume = Fixed expenses/Contribution margin per unit
= 30,000/30
= 1,000 units
B)
Volume necessary = (Fixed cost + Desired income)/Contribution margin per unit
= (30,000+15,000)/30
= 1,500 units
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