Question

Use this formula to help solve the problem. break-even point = P+V*Q+F=S*Q Assume that at one point a business sells cameras for a price of $20 each, which cost $10 to produce (variable costs). The business's fixed expenses for the period are $2,000. What is the break-even point?

Answer 1

200 units. 

Here, we have fixed expenses of $2,000 and a units price of $20 and a variable cost of $10. Rearranging the formula, and including a net profit of $0 for the breakeven point, we find that the quantity for the break-even point equals the fixed expenses divided by the difference between the unit price and the variable cost. 

Thus, $2,000 / ($20/unit - $10/unit) = 200 units at the break-even point.