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sp2606 [1]
3 years ago
8

ABC Company sells its 4G SD memory card for $ 15 per unit. The unit production cost is $ 3 and unit labor cost is $ 5. The packa

ging and shipping costs additional $ 3 per unit. The annual manufacturing costs are $ 60,000 and the promotion and advertising cost is $40,000. What is the $BEP for the company?
Business
2 answers:
Tomtit [17]3 years ago
7 0

Answer:

$93,750

Explanation:

Contribution margin=15-(5+3+3)=4

Fixed Costs=$60,000+$40,000=$100,000

Break even point  in units=$100,000/4=25,000

Break even point in $=25,000/(4/15)=$93,750

abruzzese [7]3 years ago
6 0

Answer:

$375,000

Explanation:

we must first calculate the break even point in units:

break even point in units = total fixed costs / contribution margin per unit

  • total fixed costs = $60,000 + $40,000 = $100,000
  • contribution margin = sales price - total costs per unit = $15 - ($3 + $5 + $3) = $15 - $11 = $4

break even point in units = $100,000 / $4 = 25,000 units

break even point in $ = break even points in units x sales price per unit = 25,000 units x $15 per unit = $375,000

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1 year ago
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