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# Variable Cost, how to calculate break even sales?

3) xyc Manufactures biotech sunglasses. The variable material cost is \$4.68
Per unit and variable cost is \$2.27 per unit.
a. What is the variable cost per unit?
b. If fixed cost are \$650,000during a year in which total production is \$320,000 units, what are the total costs for the year?
c. If the selling price is \$11.99 per unit, what is the break-even number of units at fixed costs of \$300,000

4) Calculate break-even sales and units.

Unit Price Unit Var Cost Fixed Costs
27.50 13.79 24,000.00
139 127 55,000.00
11 3 1500.00

5) Tires Sell for \$130. Per tire ,Unit variable costs = 76 per tire, Per month Rent = 3000 Commission per unit=10 Fixed salaries per month= \$30,000.
a. How many tires be sold to break even?
b. How many tires need be sold in order to make \$15000?
6) If the variable cost ratio is 60% and fixed costs are \$20,000 what are break even sales.

#### Solution Preview

3) xyc Manufactures biotech sunglasses. The variable material cost is \$4.68
Per unit and variable cost is \$2.27 per unit.
a. What is the variable cost per unit?

\$4.68 + \$2.27 = \$6.95 per unit

b. If fixed costs are \$650,000during a year in which total production is 320,000 units, what are the total costs for the year?

Total costs = Total fixed costs + Total variable costs
Total costs = \$650,000 + \$6.96(320,000) = \$2,874,000

c. If the selling price is \$11.99 per unit, what is the break-even number of units at fixed costs of \$300,000

First, we need to find the contribution margin per unit.

Contribution margin per unit = Unit selling price - Variable cost per unit
= ...

#### Solution Summary

This solution is comprised of a detailed explanation to calculate the variable cost per unit, break-even sales and units, and how many units required to be sold in order to achieve target profit.

\$2.19