Question

SunCrest Gardening Supply Company wants to sell a polystyrene window planter for $30. Its variable costs for each planter are $12. To break-even, SunCrest needs to sell 500 planters. Calculate SunCrest's fixed costs. Fixed Costs = ________________

Answer 1

$9,000= fixed costs

Step-by-step explanation:

Giving the following information:

Selling price= $30

Its variable costs for each planter are $12. To break-even, SunCrest needs to sell 500 planters.

To calculate the fixed costs, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

500= fixed costs/ (30 - 12)

9,000= fixed costs