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irina [24]
3 years ago
7

Steeler corporation is planning to sell 100,000 units for 2.00 per unit and will break even at this level of sales fixed expense

s will be 75,000 what are the company's variable expenses per unit
Computers and Technology
1 answer:
olga_2 [115]3 years ago
7 0

Answer:

1.25 per unit

Explanation:

Number of units to sell = 100,000

Price per unit = 2

Fixed expense = 75000

At break even point :

Revenue = total expenses

Total expenses = fixed cost + variable cost

Let variable cost = x

Revenue = units to sell * price per unit

Revenue = 100,000 * 2 = 200,000

Hence,

Fixed cost + variable cost = Revenue

75000 + x = 200,000

x = 200, 000 - 75000

x = 125,000

Variable cost = 125,000

The variable expense per unit is thus :

Variable expense / number of units

125,000 / 100,000 = 1.25 per unit

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