Explore BrainMass

# BREAK EVEN ANALYSIS

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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

#### Solution Preview

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