# I need help finding the answers to the questions attached, the class is Operating and Financial leverage

I need your help finding the answer to the folloing problems:

Shock Electronics sells portable heaters for $25 per unit, and the variable cost to produce them is $17. Mr. Amps estimates that the fixed costs are $96,000.

a.) How do I compute the break-even point in units?

b.) How do I fill in the table below (in dollars) to illustrate that the break-even point has been achieved.

sales

fixed costs

total variable costs

net profit (loss)

Therapeutic Systems sells its products for $8 per unit. It has the following costs:

Rent $120,000

Factory labor $1.50 per unit

Executive salaries $112,000.

Raw material $.70 per unit

How do I seperate the expenses between fixed and variable costs per unit. And using this information and the sales per unit of $6, How do I compute the break- even point?

I greatly appreciate your help thank you very much

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#### Solution Preview

Shock Electronics sells portable heaters for $25 per unit, and the variable cost to produce them is $17. Mr. Amps estimates that the fixed costs are $96,000.

a.) How do I compute the break-even point in units?

the marginal contribution of each unit is MC = P-VC = 25-17= $8

Then the break-even point q = ...