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Break Even

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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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.