Respuesta :
- Selling price per composite unit: $2,600.
- Variable cost per composite unit: $1,700.
- Break-even point in composite units: 1,000 units.
- Break-even point in total 10,000 units.
What is a break-even point?
- When total cost and total revenue are equal, a small business is said to have reached its break-even point and is in a neutral position. In other words, you've arrived at the point in your manufacturing cycle where the revenue from a product is equal to its production expenses.
- Use the following calculation to determine the break-even point in units: Break-Even Point (in Units) = Fixed Costs (Sales Price Per Unit - Variable Cost Per Unit) or, when expressed in Sales Dollars, as follows: Break-Even Point (in sales dollars) = Contribution Margin – Fixed Costs.
- When a company's revenues and expenses were equal for a certain accounting period, this circumstance is known as the break-even point (BEP) in accounting. In other words, the corporation "broke even," meaning there were no net earnings or losses.
The complete question is:
Handy Home sells windows and doors in the ratio of 8:2 (windows: doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is $350. Fixed costs are $900,000. Use this information to determine the (1) selling price per composite unit, (2) variable costs per composite unit, (3) break-even point in composite units, and (4) number of units of each product that will be sold at the break-even point.
To learn more about the break-even point refer to:
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