Question

In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2020. What is Teller’s break-even point in units for 2020? g

Answer 1

Answer:

Break-even point in units= 1,500

Explanation:

Giving the following information:

Selling price= $600

Unitary variable cost= $420

Fixed cost= $270,000

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 270,000 / (600 - 420)

Break-even point in units= 1,500