Answer:
Break-even point= 58621 units
Explanation:
Giving the following information:
Sales (50,000 units) $ 1,000,000
Costs:
Direct materials $ 270,000
Direct labor 240,000
Fixed factory overhead 100,000
Variable factory overhead 150,000
Fixed marketing costs 110,000
Variable marketing costs 50,000
We need to use the following formula:
Break-even point= fixed costs/ contribution margin
Price= 1,000,000/50,000= $20
Variable cost= direct material + direct labor + variable moh + variable mkt cots= 270,000 + 240,000 + 150,000 + 50,000= $710,000
Unitary variable cost= 710,000/50,000= $14.2
Fixed costs= fixed moh + fixed mkt= 100,000 + 110,000= 210,000
Profit= 130,000
Break-even point= (210,000 + 130,000) / (20 - 14.2)= 58621 units
