The annual breakeven point is $550157
Given that the Sales price is $ 31.00, Per-unit variable costs: Invoice cost is 17.05, Sales commissions is 4.05, Total per-unit variable costs is $ 21.10, Total annual fixed costs: Advertising is $ 23,100, Rent is 28,200, Salaries is 124,200 and Total fixed costs is $ 175,500.
The break-even point is your total fixed cost divided by the difference between the unit price and the variable cost per unit.
The sales price is $31 and the total variable cost is $21.10.
Now, we will find the Contribution margin by subtracting the Total variable cost from the sales price, we get
Contribution margin= Sales price-Total sales price
Contribution margin=31-21.10
Contribution margin=9.9
Further, we will find the contribution margin ratio by dividing the contribution margin by Sales price, we get
contribution margin ratio=contribution margin/Sales price
contribution margin ratio=9.9/31
contribution margin ratio=0.319
contribution margin ratio=31.9%
Furthermore, we will find the break-even point, we get
Break-even point=Fixed cost/contribution margin
Break-even point=175500/9.9
Break-even point=17727.27
Now, we will find the break-even sales in dollars, we get
Break-even sales=Fixed cost/contribution margin ratio
Break-even sales=(175500/31.9)×100
Break-even sales=550157
Hence, the annual breakeven point in unit sales is calculated to be $550157.
Learn more about the break-even point from here brainly.com/question/10573173.
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