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Fintel produces dry erase markers that have a selling price of $2.35 and a variable cost of $.70. Fixed costs are $82,500. What is the breakeven point?Multiple choice question.50,0003,617$1.65117,857

Question

Fintel produces dry erase markers that have a selling price of 2.35andavariablecostof2.35 and a variable cost of .70. Fixed costs are 82,500.Whatisthebreakevenpoint?Multiplechoicequestion.50,0003,61782,500. What is the breakeven point?Multiple choice question.50,0003,6171.65117,857

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Solution

The breakeven point is the point at which total revenue equals total costs, meaning the business is not making a profit or a loss.

The formula to calculate the breakeven point in units is:

Breakeven Point in Units = Fixed Costs / Contribution Margin per Unit

Given that the fixed costs are 82,500andthecontributionmarginperunitis82,500 and the contribution margin per unit is 2.35 - 0.70=0.70 = 1.65, we can substitute these values into the formula:

Breakeven Point in Units = 82,500/82,500 / 1.65 = 50,000 units

Therefore, the breakeven point is 50,000 units.

This problem has been solved

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