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    BREAK EVEN ANALYSIS

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    Detailed explanation and calculation on how to calculate break even and use it to solve business problems and make decisions.

    © BrainMass Inc. brainmass.com June 4, 2020, 2:27 am ad1c9bdddf
    https://brainmass.com/business/accounting/break-even-analysis-458873

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    SOLUTION
    Basic Information
    Number of units = 3,000
    Variable manufacturing cost $300 per unit
    Variable marketing cost $50
    Total Variable Cost per unit = $300 + $50 = $350

    Fixed mfg cost $120 per unit
    Fixed mkg cost $140
    Total Fixed Cost per unit = $120 + 140 = $260
    Total Fixed Cost = $260 X 3,000 units = $780,000

    Selling Price = $740 per unit

    Question 1
    a. The breakeven level in units
    Total Revenue - Total Variable Cost - Total Fixed Cost = Income
    $740a - $350a - $780,000 = 0
    $390a = $780,000
    a = $780,000/390
    a = 2,000 units
    Breakeven Volume = 2,000 units

    b. The breakeven level in revenue ...

    Solution Summary

    Detailed explanation and calculation on how to calculate break even and use it to solve business problems and make decisions.

    $2.19

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