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 .70. Fixed costs are 1.65117,857
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 2.35 - 1.65, we can substitute these values into the formula:
Breakeven Point in Units = 1.65 = 50,000 units
Therefore, the breakeven point is 50,000 units.
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