Answer:
Rogue Outdoor’s break-even point in units and dollars is 720 units and $72,000 respectively.
Explanation:
In this question we use the formula of break-even point in the unit which is shown below:
= (Fixed expenses) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $100 - $50
= $50
Now put these values to the above formula
So, the value would equal to
= $36,000 ÷ 50 per units
= 720 units
And, the formula of break-even point in dollars which is shown below:
= (Fixed expenses) ÷ (Contribution margin ratio)
where,
Contribution margin ratio = (Contribution margin ÷ selling price per unit) × 100
where, Contribution margin = Selling price per unit - Variable expense per unit
)
= $100 - $50
= $50
So, the contribution margin ratio = 50%
Now put these values to the above formula
So, the value would equal to
= $36,000 ÷ 50%
= $72,000
