## Related questions with answers

Question

A company’s fixed operating costs are $430,000, its variable costs are$2.95 per unit, and the product’s sales price is $4.50. What is the company’s break-even point; that is, at what unit sales volume will its income equal its costs?

Solution

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1 of 4This problem involves trying to find the unit sales volume break-even point(BEP). The break-even point is the point in which unit sales income equals the cost of production. The equation posted below will be used to determine that break-even point

$\textbf{BEP}$ = $\dfrac{\textbf{Fixed operating costs}}{(\textbf{Sales price per unit}-\textbf{Variable costs per unit})}$

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