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

Question

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] · Answer 1 · 2022-02-28T00:58:39+03:00

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] · Answer 2 · 2022-02-28T02:41:57+03:00

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