Answer:
$500,000
Explanation:
The computation of the break even point in dollars is shown below:
= (Fixed cost) ÷ (Profit volume ratio)
where,
Profit volume ratio = Contribution margin per unit ÷ Selling price per unit
= $180 ÷ $600
= 0.3
Contribution margin per unit = Selling price per unit - variable cost per unit
= $600 - $420
= $180
And, the fixed cost is $150,000
Now put these values to the above formula
So, the value would be equal to
= $150,000 ÷ 0.3
= $500,000
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Answer:
Trade-in allowance
Explanation:
A trade-in allowance is a type of discount in which the price of a good is reduced by the value of a another good that the buyer gives to the seller.
In this question, we have a trade-in-allowance because buyers give a product (a used vacuum cleaner) valued at $100 in exchange for a discount by the same amount of the total price of the new vacuum that they want to buy.