Question

Fuschia company's contribution margin per unit is $12. total fixed costs are $84,000. what is fuschia's break-even point in units?

Answer 1

700units is fuschia's break-even point in units.

       

BEP(units)  = fixed cost/contribution margin per unit

84000/12 = 700units  

Fixed costs are costs that do not change whilst sales or manufacturing volumes boom or lower. this is because they may be now not at once associated with manufacturing a product or turning in a provider. As a result, fixed fees are taken into consideration to be indirect costs.

Fixed costs tend to be expenses that are based on time rather than the quantity produced or sold by your business. Examples of fixed prices are rent and rent costs, salaries, utility payments, insurance, and mortgage payments. some kinds of taxes, like enterprise licenses, are also fixed costs.

Variable costs change primarily based on the quantity of output produced. Variable costs may encompass exertions, commissions, and uncooked substances. Fixed costs remain the same regardless of manufacturing output. fixed prices may additionally include lease and rental bills, coverage, and interest bills.

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