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    fixed and variable costs per unit

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    Therapeutic Systems sells its products for $8 per unit. It has the following costs:

    Fixed: Rent $ 120,000
    Variable: Factory labor $ 1.50 per unit
    Fixed: Executive salaries $ 112,000
    Variable: Raw materials $ 0.70 per unit

    Separate the expenses between fixed and variable costs per unit (I have separated the expenses into their classifications, but I need information about the "per unit" calculations). Using this information and the sales price per unit of $6, compute the break-even point

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    Solution Preview

    It's unclear if the price is $8 per unit or $6. Because at the beginning, you said "Therapeutic Systems sells its products for $8 per unit", ...

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    This solution provides a detailed, step by step explanation of the given economics question.