Answer:
8,000 units
Explanation:
Fixed Cost = $110,000
Selling Price = $25 per unit
Variable Cost = Revenue - Net Income - Fixed Cost
Variable Cost = $315,000 - $63,250 - $110,000
Variable Cost = $141,750
Contribution Margin = Sales - Variable Expenses
Contribution Margin = $315,000 - $141,750
Contribution Margin = $173,250
Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = $173,250 / $315,000
Contribution Margin Ratio = 0.55
Break-even point (in dollars) = Fixed Cost / Contribution Margin Ratio
Break-even point (in dollars) = $110,000 / 0.55
Break-even point (in dollars) = $200,000
Break-even point (in units) = $200,000 / $25
Break-even point (in units) = 8,000 units
