Question

Agassi Corporation sells products for $90 each that have variable costs of $60 per unit. Agassi’s annual fixed cost is $450,000. Required Determine the break-even point in units and dollars.

Answer 1

Answer:

Break even point in unit will be 15000

And in dolor it will be $1350000

Explanation:

We have given selling price for each product = $90

Variable cost = $60 per unit

Contribution margin = $90 - $60 = $30 per unit

Fixed cost = $450000

We have to find the break even point

We know that break even point is given by

Break even point $=\frac{fixed\ cost}{contribution\ margin}=\frac{450000}{30}=15000unit$

Break even point in dolor = $90×15000 = $1350000