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    Break Even

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    Canoe Company has two products. In the past, Canoe has averaged sales of four standard models at a price of $250 and one deluxe model at a price of $750 each day. Variable costs total $75 for the standard model and $200 for the deluxe model. If fixed costs are $281,250, how many canoes must be sold in order for the company to break even?

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    Solution Preview

    Standard %= 80% =4/5
    Deluxe%= 20% =1/5

    Selling price of standard= $250
    Variable cost of standard= $75
    Contribution from the sale of standard= $175 =$250-$75

    Selling price of deluxe= $750
    Variable cost of deluxe= $200 ...

    Solution Summary

    Calculates the break even point.