Step-by-step answer to break even analysis
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C-V-P Analysis:
Jesse, Inc., located in Mesa, Arizona, manufactures high-end baby chairs. The firm's cost accountant,
Lisa, has been assigned by the CEO to determine how many baby chairs Jesse,
Inc., needs to make and sell in order to break even. She is given the following data:
Determine how many baby chairs Jesse, Inc., needs to make and sell in order to break even.
Baby chair sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15
Variable cost per baby chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Production worker salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,350
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Solution Summary
The expert determines the number of baby chairs Jesse, Inc., needs to make and sell in order to break even.
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Break even (in units) = Fixed Cost / Contribution per ...
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