Question

Baird Corporation sells products for $28 each that have variable costs of $16 per unit. Baird's annual fixed cost is $278,400. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Break-even point in units Break-even point in dollars

Answer 1

Solution

Breakeven Point in unit	23200
Breakeven point in dollars	$649600

Working

Breakeven Point is the point at which there is no profit or loss from the given product , goods . At Breakeven Point total contribution margins is equal to total cost .

Formula for Breakeven Point (Unit)

BEP(Unit )=Fixed Cost / Contribution Margin per unit

Contribution Margin , it the Margin which company expect on there product after covering Variable product cost

Contribution Margin

Particulars	Price per unit
Selling Price	$28
Less : Variable Cost	$16
Contibution Margin per Unit	$12

Total Fixed Cost = $278400

BEP (Unit ) = $278400/12

BEP (Unit )=23200 unit

BEP (Sales ) = BEP ( Unit) * Selling Price per unit

=23200*28

BEP ( Sales )=$649600