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Longstreet Inc. has fixed operating costs of $470,000, variable costs of $2.80 per unit produced, and its product sells for $4.00 per unit. What is the company's break-even point, i.e., at what unit sales volume would income equal costs? a. 411,250 b. 476,073 c. 431,813 d. 453,403 e. 391,667

Respuesta :

Answer:

e. 391,667 units

Explanation:

The computation of break-even point is shown below:-

For computing the break-even point first we need to find out the contribution per unit which is shown below:-

Contribution per unit = Selling price - Variable cost

= $4.00 - $2.8

= $1.2

So, The break-even point = Break even point= Fixed costs ÷ Contribution per unit

= $470,000 ÷ $1.2

= 391,666.66

= 391,667 units

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