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Tanzania [10]
3 years ago
14

A company’s fixed operating costs are $430,000, its variable costs are $2.95 per unit, and the product’s sales price is $4.50. W

hat is the company’s break-even point; that is, at what unit sales volume will its income equal its costs?
Business
1 answer:
vredina [299]3 years ago
4 0

Solution:

Given information:

The fixed operating costs are$430,000.

The variable costs per unit are $2.95.

The selling price of the product is $4.50.

Calculation of the break-even point:

The formula to calculate the break-even point is:  

Break-even point = Fixed costs / Selling price per unit -Variable costs per unit  

                             = 430,000 / 4.50 - 2.95

                            = 430,000 / 1.55 = 277,419

Substitute $430,000 for the fixed costs, $2  

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