Oman industries, inc. reported sales of $1000,000 for the month and incurred variable expenses totaling $650,000...

Oman industries, inc. reported sales of $1000,000 for the month and incurred variable expenses totaling $650,000 and fixed expenses totaling $100,000. 8000 units were produced and sold during the month.

what is the company's break-even in units?

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Expert Solution

Sales per unit = $ 1,000,000/8,000 = $ 125

Variable cost per unit = $ 650,000/8,000 = $ 81.25

Contribution margin per unit = Sales – variable cost

= $ 125 - $ 81.25 = $ 43.75

Break-even sales in units = Fixed cost/ Contribution margin per unit

= $ 100,000/$ 43.75

= 2,285.714 or 2,286 units

ekkarill92 answered 1 year ago

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