Question

"Kelly Company sells its only product for $200 per unit. It has variable costs of $90 per unit. Annual fixed operating costs amount to $12,100,000. Kelly's break-even point in units is:"

Answer 1

Break-even point= 110,000 units

Step-by-step explanation:

Giving the following information:

Kelly Company sells its only product for $200 per unit. It has variable costs of $90 per unit. Annual fixed operating costs amount to $12,100,000.

To calculate the break-even point in units, we need to use the following formula:

Break-even point= fixed costs/ contribution margin

Break-even point= 12,100,000/ (200 - 90)= 110,000 units