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Brian O'Neil intends to sell his customers a special round-trip airline ticket package. He is able...

Brian O'Neil intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $400 each. The airline intends to reimburse Brian for any unsold ticket packages. The round-trip tickets will be sold for $500 each. How many units will he need to sell in order to break even assuming Brian incurred $10,000 in expenses to advertise the sale, and there are no other expenses?

125 packages?

100 packages?

20 packages?

75 packages?

25 packages?

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Answer #1

Break even point = Fixed cost / ( Selling price - Variable cost ) = $10,000 / ( $500 - $400 ) = 100 packages

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