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Break-Even Point and Profit - Hazardous Toys Company

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Problem P5-2, Chapter 5, Block & Hirt, Finance and Accounting 11th edition.

Hazardous Toys Company prduces 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 Summary

This shows how to determine the break-even point, as well as the number of units needed to earn a specific profit.

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a) Compute the break-even point in units.

Cost = 15000+7.5x ...

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