Break Even units
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ConnectAll has fixed costs of $689,698. Selling price per unit is $156 and variable cost per unit is $22.
a) How many units must ConnectAll sell in order to break even?
b) How many units must ConnectAll sell in order to earn a profit of $302,036?
c) A new employee suggests that ConnectAll sponsor a company softball team as a form of advertising. The cost to sponsor the team is $2,412. How many more units must be sold to cover this cost?
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Solution Summary
The solution explains how to calculate the number of units for breakeven and so earn a desired profit
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a) How many units must ConnectAll sell in order to break even?
Breakeven units = Fixed cost/unit contribution margin
Fixed cost = 689,698
Unit contribution margin = 156-22=$134
Breakeven units =689,698/134 = 5,147 ...
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