If fixed expenses totaled $108,000 for the year, the break-even point in unit sales was:21, 600 Units
Explanation:
The Break Even Point in units is 21,600units.
We follow the below steps in order to arrive at the answer:
First we find Total variable costs of Moyas Corporation
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<u>Net operating income=Sales-variable cost-Fixed cost</u>
47000=310000-variable cost-108000
Variable cost=310000-108000-47000
Variable Cost=155000
<u>Next we find the number of units sold</u>
<u>No:of unit sold= Total Sales/Selling price per unit</u>
No:of unit sold =310000/10=31,000
<u>Then we find Variable Cost per unit</u>
<u>Variable cost per unit=Total Variable cost/Number of unit sold</u>
Variable cost per unit=155000/31000=5
<u>We calculate Contribution Margin per unit </u>
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<u>Contribution Margin per unit =Selling price per unit-Variable cost per unit</u>
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Contribution Margin per unit = 10-5= 5
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<u>Finally we calculate Break Even Point (BEP) in units as:</u>
<u>BEP=</u><u>Fixed cost per unit/</u>Contribution Margin per unit
BEP=108,000/5=21600 Units
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