Answer:
Giving the following information:
Units sold= 450,000
Total Sales= $12,150,000
Total variable cost= $6,925,500
Total fixed cost= $3,242,673
First, we need to calculate the unitary selling price and variable cost. Then, we calculate the contribution margin.
Selling price= 12,150,000/450,000= $27
Unitary variable cost= 6,925,500/450,000= $15.39
Contribution margin per unit= 27 - 15.39= $11.61
To calculate the contribution margin ratio, we need to use the following formula:
Contribution margin ratio= contribution margin/ selling price
Contribution margin ratio= 11.61/27
Contribution margin ratio= 0.43
To calculate the break-even point both in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 3,242,673 / 11.61= 279,300 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,242,673/0.43= $7,541,100
Finally, we need to incorporate the desired profit to the break-even point formula:
Break-even point in units= (3,242,673 + 426,087) / 11.61
Break-even point in units= 316,000 units
Step-by-step explanation:
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