In: Accounting
Determine the unit break-even point, assuming fixed costs are $30,000 per period, variable costs are $19.00 per unit, and the sales price is $25.00 per unit.
CALCULATION OF CONTRIBUTION MARGIN | ||||
PARTICULARS | AMOUNT | |||
Selling Price Per Unit= | $ 25 | |||
Less: Variable Cost Per Unit | $ 19 | |||
Contribution Margin Per Unit | $ 6 | |||
Answer = 1 | ||||
CALCULATION OF THE BREAK EVEN POINT IN UNITS | ||||
Break Even point = Fixed Cost / Contribution Margin Per Unit | ||||
Break Even point = | ||||
Fixed Cost = | $ 30,000 | |||
Divide By | "/" By | |||
Contribution Margin Per Unit = | $ 6 | |||
Break Even point = | 5000 | Units | ||
Answer = Unit Break even point = 5000 Units | ||||