Answer:
Break-even point in units= 18,000 units
Explanation:
Giving the following information:
Selling price= $10
Fixed costs= $72,000
Sales= 200,000
Net income= 8,000
<u>First, we need to calculate the unitary contribution margin.</u>
Sales in units= 200,000/10= 20,000 units
Total contribution margin= net income + fixed costs
Total contribution margin= 8,000 + 72,000= $80,000
Unitary contribution margin= 80,000/20,000= $4
<u>Now, using the following formula, the break-even point in units.</u>
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 72,000/4
Break-even point in units= 18,000 units
