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    Breakeven sales in units -variable and absorption costing

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    Total fixed manufacturing overhead - $180,000
    Total other fixed expenses - $200,000
    Total variable manufacturing expenses - $120,000
    Total other variable expenses - $120,000
    Units produced - 30,000 units
    Budgeted production - 30,000 units
    Units sold - 25,000 units
    Selling price - $40

    1.What are breakeven sales in units using variable costing?
    2.What are breakeven sales in units using absorption costing?

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    Solution Preview

    Breakeven sales is when the total revenue = total cost

    1.What are breakeven sales in units using variable costing?

    Breakeven sales under variable costing is given as
    Breakeven units = Fixed cost/unit contribution margin
    Fixed cost = 180,000+200,000=380,000
    Total ...

    Solution Summary

    The solution explains how to calculate the breakeven sales in units under variable and absorption costing