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zysi [14]
1 year ago
5

You own a small manufacturing business that produces widgets. You have spent $400,000 acquiring the fixed assets you need to pro

duce widgets. Each widget costs you $3 to make and they sell for $25 each, so your variable cost is 12% of the overall revenue. At your current level of operating leverage, how many widgets must you sell to break even
Business
1 answer:
anygoal [31]1 year ago
4 0

At the current level of operating leverage, the small manufacturing business needs to sell <u>18,182 units</u> of widgets to break even.

<h3>What is the break-even point?</h3>

The break-even point is the level of production and sales required so that the entity does not incur any losses or earn any profits.

At the break-even point, the total costs (fixed and variable) equal the sales revenue.

<h3>Data and Calculations:</h3>

Fixed assets = $400,000

Production cost of each widget = $3

Selling price per unit = $25

Variable cost per unit = $3 ($25 x 12%)

Contribution margin per unit = $22 ($25 - $3)

Break-even point in units = Fixed Costs/Contribution margin per unit

= 18,182 units ($400,000/$22)

Thus, at the current level of operating leverage, the small manufacturing business needs to sell <u>18,182 units</u> of widgets to break even.

Learn more about break-even analysis at brainly.com/question/21137380

#SPJ1

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Answer:

Instructions are listed below

Explanation:

Giving the following information:

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Activity rate= total estimated activity cost for the period/ total amount of allocation base:

Labor-related= 19600/10000= $1.96

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7 0
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Answer:

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Explanation:

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And the most worthy information is the one that allows a person to predict the futuro. For instance, who knows what will be the price of oil in one year.

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