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    Break Even Analysis - Hazardous Toys Company

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    Hazardous Toys Company produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed costs are $15,000.

    a. Compute the break-even point in units
    b. Find the sales (in units) needed to earn a profit of $25,000.

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    Solution Preview

    a. Compute the break-even point in units

    Breakeven point is where the total contribution margin = fixed costs since the operating income is zero. In terms of an ...

    Solution Summary

    The solution explains how to calculate the breakeven units and the units needed for desired profits