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Break -even point

Tboy produces only one type of product.

The budget for the year is as follows:
Selling price per unit $25
Variable Cost per unit $8
Total Fixed Costs $210,000
Budgeted profit $300,000

Required
? Calculate the break even point in dales volume and the margin of safety in sales revenue for the budgeted figures.
? From the information, calculate by what percentage the selling price needs to change in order for a profit of $240,00 to be earned.

Solution Preview

Hi,
Please see the response to your posting as below:
Break-even sales = Total fixed cost /(selling price per unit -variable cost per unit)* selling price=$210000/($25-$8)*$25=$308825 (approx)
Total Contribution from budgeted sales =fixed ...

Solution Summary

Solution contains calculation of break-even point.

$2.19