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Finding Breakeven quantity and sales in dollars

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Sonny's Corporation is considering starting a new company to produce stereos. The sales price would be set at 1.5 times the variable cost per unit; the VC/unit is estimated to be $2.50; and fixed costs are estimated at $120,000. What sales volume would be required in order to break even, i.e., to have an EBIT of zero for the stereo business?

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Solution Summary

Solution describes the steps for finding out breakeven quantity and volume for Sonny's Corporation.

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Solution:

Fixed costs =$120000
Variable cost, V=$2.50
Selling ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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