Selling price $5.00 and the unit contribution margin is $2.20 and the fixed cost $5000. Calculate...

Selling price $5.00 and the unit contribution margin is $2.20 and the fixed cost $5000. Calculate X Ltd's break-even point in sales dollars?

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Expert Solution

As per the information provided for X Ltd. :

Sales Price $ 5.00

Unit Contribution Margin $ 2.20

Fixed cost $ 5000

First of all, we need to calculate , break even point sales in units:

Break even point sales (Unit) = Fixed cost / unit contribution margin

= $ 5000 / $ 2.20

= 2272.72 units (i.e 2273 units)

Break even point sales in dollers = Break even point units * sales price per unit

= 2273 * $ 5.00

= $ 11,365.00

ekkarill92 answered 1 year ago

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