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Shock Electronics sells portable heaters for $35 per unit, and the variable cost to produce them is $22. Mr. Amps estimates that the fixed costs are $97,500.

a. Compute the break-even point in units.

Respuesta :

Break-even point in units is 7,500 unit

Given that;

Cost of each heater = $35

Variable cost of each heater = $22

Fixed cost = $97,500

Find:

Break-even point in units

Computation:

Contribution = Sales - VC

Contribution = $35 - $22

Contribution = $13

Break-even point in units = Fixed cost / Contribution

Break-even point in units = 97,500 / 7

Break-even point in units = 7,500 unit

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