Question

a company manufactures and sells a product for $113 per unit. the company's fixed costs are $73,860, and its variable costs are $83 per unit. the company's break-even point in units is:

Answer 1

To find the break-even point in units, we need to determine the number of units the company needs to sell to cover its total costs. The break-even point occurs when the total revenue equals the total costs.

Let's denote the break-even point as 'x' (the number of units sold).

The total cost (TC) is the sum of the fixed costs (FC) and the variable cost per unit (VC) multiplied by the number of units (x):

TC = FC + VC * x

In this case, the fixed cost (FC) is $73,860, and the variable cost per unit (VC) is $83.

TC = $73,860 + $83 * x

The total revenue (TR) is the product price per unit (P) multiplied by the number of units (x):

TR = P * x

In this case, the product price per unit (P) is $113.

TR = $113 * x

Now, at the break-even point, the total revenue should equal the total cost:

TR = TC

$113 * x = $73,860 + $83 * x

Now, we can solve this equation to find the value of x:

$113x - $83x = $73,860

$30x = $73,860

x = $73,860 / $30

x ≈ 2462

Therefore, the break-even point for the company is approximately 2462 units. They would need to sell 2462 units to cover all their costs and break even.