Question

Holly's ham, inc. sells hams during the major holiday seasons. during the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs. breakeven point in units is:

Answer 1

To find: Breakeven point (in units)  
Given: Number of hams sold = 11000
 Sales revenue = $220,000 
 Variable cost = $55,000
 Fixed cost = $24,000 
 Solution: Break-even point (in units) can be calculated as:-
  Fixed costs / (sales price per unit-variable costs per unit) 
 Fixed costs = $24,000
 Sales price per unit = total sales revenue/number of units = 220000/11000 =
$20
 Variable costs per unit = total variable cost/number of units = 55000/11000 = $5 
 Putting values in the formula, 
 =24000 / (20-5)
 =24000/15
 =1600 
 Breakeven point (in units) = 1600 units