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Break Even Analysis

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School Hiker

Model Model

Sales Unit 40,000 40,000
Selling price per unit $6.00 $18.00
variable expense per unit $2.00 $10.00

The company's total fixed cost are $80,000, there are no beginning or ending inventories

Question 1
What would be the per unit contribution for each of the two models

Question 2
What is the break even analysis in terms of sales dollars if the sales mix remain constant?

Question 3
If the sales mix is changes to 60,000 units of the school model and 20,000 units of the Hiker model, what will be the break even point in terms of sales dollars (for both)

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Solution Summary

The solution explains the calculation of breakeven point.

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