Question
In: Finance
You own a donut shop. Your overhead is $2800/month. You sell several items, but you want...
You own a donut shop. Your overhead is $2800/month. You sell several items, but you want to know the break-even point of the donuts since it's mainly what you sell. You sell them for $3 and your variable cost (the box) is $.50. What is your BEP. Also, what would your total sales on the donuts be.
Solutions
Expert Solution
| Ref | Particulars | Per unit |
| Units | ||
| a | Sales revenue | 3.00 |
| Minus: | ||
| b | Variable cost | 0.50 |
| c= a-b | Contribution | 2.50 |
| Break even point | ||
| a | Contribution per unit | 2.50 |
| b | Fixed costs | 2,800 |
| c=b/a | BEP units | 1,120.00 |
| d | Selling price | 3.00 |
| e= c*d | BEP sales | $ 3,360.00 |
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