Break even analysis accompany fixed operating cost are 430000 its variable costs are 2.95 per unit...

Break even analysis accompany fixed operating cost are 430000 its variable costs are 2.95 per unit and the product sales prices is 4.50 what is the company break even point that is at what unit sales volume will its income equal its cost

Expert Solution

Break even point of a product is defined at point of no profit no loss
I.e. if the company sales at Break even point than its total cost is (variable and Fixed)
is just equal to its revenue. So there is 0 profit by selling at that point
	Per unit	as %
Sales Price	$4.50	100.00%
Less: Variable cost	2.95	65.56%
Contribution Margin	$1.55	34.44%

Fixed Cost	$ 430,000

Break Even point = Fixed cost ÷ Contribution margin per unit
	430000 ÷ 1.55
	277,419.35	or	277,420	Units rounded

Break Even point in $	FC ÷ CM%
	$ 1,248,387

ekkarill92 answered 2 months ago

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