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Break even Analysis

Product A sells for a unit price of $20. Variable costs are $8 and fixed costs are $600,000.

a) Calculate the amount of sales in $ required to break even.
b) Calculate the amount of sales in $ required to earn a 15% profit on costs.

Please answer both questions and list all of the steps invloved in achieving each result.

Solution Preview

Product A sells for a unit price of $20. Variable costs are $8 and fixed costs are $600,000.

a) Calculate the amount of sales in $ required to break even.
b) Calculate the amount of sales in $ required to earn a 15% profit on costs.

Please answer both questions and list all of the steps invloved in achieving each result.

a) Calculate the amount of sales in $ required to break even.

Break even sales= S* = F/(1-V/P) ...

Solution Summary

The solution provides answers to questions on Break even Analysis.

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