The number of Toby's tiny toys is 13,475 which needs to sell to reach its break-even point.
The overall revenues and entire costs are equal at the break-even point (fixed and variable).
The production and sales units that will verify that Toby's Tiny Toys does not suffer a loss or make a profit are the break-even point.
$16.50 is the selling price per unit.
Variable costs amount to $12.50 per unit.
The contribution margin = $16.50 - $12.50 = $4 per unit equals
Fixed costs is $53,900.
Break-even point = Fixed costs / Contribution margin
Break-even point = $53,900/$4
Apply division operation to get
Break-even point = 13,475
Thus, the number of Toby's tiny toys is 13,475 which needs to sell to reach its break-even point.
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