Question

Harvest Inc. produces and sells a single product. The selling price of the product is $200.00 per unit and its variable cost is $80.00 per unit. The fixed expense is $300,000 per month. The break-even in monthly unit sales is closest to:

Answer 1

Answer:

Break-even point (units)= 2,500 units

Explanation:

Giving the following information:

The selling price of the product is $200.00 per unit and its variable cost is $80.00 per unit. The fixed expense is $300,000 per month.  

To calculate the break-even point in units, we need to use the following formula:

Break-even point (units)= fixed costs/ contribution margin

Break-even point (units)= 300,000 / (200 - 80)

Break-even point (units)= 2,500 units