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Deterrmining Break-Even Sales Volume and Dollars

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Hollis Company sells a single product for $20 per unit. The company's fixed expenses total $240,000 per year, and variable expenses are $12 per unit of product. The company's break-even point is:

1. 12,000 units

2. 20,000 units

3. $600,000

4. $400,000
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Solution Summary

This solution describes the formulas to determine the break-even point in both sales units and sales dollars.

Solution Preview

The break-even number of units=Fixed Costs/(Sales Price per unit-Variable Cost Per Unit), or $240,000/($20-$12). This ...

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