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Target Profit Trailblazer Company sells a product for $265 per unit. The variable cost is $120 per unit, and fixed costs...

Target Profit Trailblazer Company sells a product for $265 per unit. The variable cost is $120 per unit, and fixed costs are $1,000,500. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $350,175. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $350,175 units

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Answer #1

(a) the break-even point in sales units

Break even points in units = Fixed costs / Contribution margin per unit

Contribution margin per unit = Sales - Variable costs

Break even points in units = $1,000,500 / ($265 - $120)

= $1,000,500 / $145

= 6,900 units

(b) the break-even point in sales units if the company desires a target profit of $350,175.

Sales units = (Fixed costs + Desired profits) / Contribution margin per unit

= ($1,000,500 + $350,175) / $145

= 9,315 units

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