Answer:
Break-even point in units= 172 units
Explanation:
Fixed costs= 5,000 + 15,000= $20,000
Direct labor cost= [(10*8)*3]*30= $7,200
Tax= $500 per unit
Direct material= $2,500 per unit
<u>To calculate the number of units to be sold, we need to use the following formula:</u>
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (20,000 + 7,200 + 1,000,000) / (9,000 - 500 - 2,500)
Break-even point in units= 172 units
<u>Prove:</u>
Sales= 172*9,000= 1,548,000
Variable costs= 172*3,000= (516,000)
Contribution margin= 1,032,000
Fixed costs= 27,200
Net income= 1,004,800