Answer:
Break-even point= 1,200 units
Break-even point (dollars)= $600,000
Explanation:
Giving the following information:
Cannon Co. has a unit selling price of $500, variable cost per unit $300, and fixed costs of $240,000.
To calculate the break-even point in units, we need to use the following formula:
Break-even point= fixed costs/ contribution margin
Break-even point= 240,000/ (500 - 300)
Break-even point= 1,200 units
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 240,000/ (200/500)
Break-even point (dollars)= $600,000
