Answer:
Break-even point in units= 93 units
Explanation:
Giving the following information:
Its fixed costs are $1000 a week and its variable costs for one batch of umbrellas per week are $500 for 2000 units.
After doing market research, the company sets the price per umbrella at $11.
Unitary variable cost= 500/2,000= $0.25
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 1,000/ (11 - 0.25)
Break-even point in units= 93 units
