Question

A company that manufactures laser printers for computers has monthly fixed costs of $177,000 and variable costs of $650 per unit produced. The company sells the printers for $1,250 per unit. How many printers must be sold each month for the company to break even

Answer 1

Answer:

295 units

Explanation:

The cost -volume-profits CVP concepts calculate the breakeven point by dividing fixed costs by the contribution margin per unit.

i.e., Breakeven point = Fixed cost/ contribution margin per unit.

For this company,

Fixed costs are $177,000

Contribution margin per unit

= selling price - variable costs.

=$1250 -$650

=$600

Breakeven point = $177,000 / $600

=295 units