What is the break-even point in unit sales?

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 90,000 Variable expenses 49,500 Contribution margin 40,500 Fixed expenses 33,210 Net operating income $ 7,290

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Expert Solution

Contribution margin per unit = Total Contribution margin / sales volume

Contribution margin per unit = $40,500 / 1,000 units

Contribution margin per unit = $40.50 per unit

Break-even point in unit sales = Fixed expenses / Contribution margin per unit

Break-even point in unit sales = $33,210 / $40.50 per unit

Break-even point in unit sales = 820 units

DEEPIKA GOYAL answered 1 year ago

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