Question

The Warren Watch Company sells watches for $26, fixed costs are $155,000, and variable costs are $13 per watch. What is the break-even point

Answer 1

The break-even points for The Warren Watch Company can be computed as follows:

1. The break-even point in units = Fixed costs/Contribution margin per unit

= 11,923 units ($155,000/$13).

2. The break-even point in dollars = Fixed costs/Contribution margin ratio

= $310,000 ($155,000/50%).

Data and Calculatioins:

Fixed costs = $155,000

Selling price per unit = $26

Variable costs per unit = $13

Contribution margin per unit = $13 ($26 - $13)

Contribution margin ratio = 50% ($13/$26 x 100)

The break-even point in units = Fixed costs/Contribution margin per unit

= 11,923 units ($155,000/$13).

The break-even point in dollars = Fixed costs/Contribution margin ratio

= $310,000 ($155,000/50%).

Learn more about break-even point here: brainly.com/question/9212451

Answer 2

Based on the information given the break-even point is 11,923 units.

Break Even Point:

Using this formula

Break Even Point = Fixed Cost / (selling price per unit - Variable cost per unit)

Where:

Fixed Cost=$155,000

Selling price per unit=$26

Variable cost per unit=$13

Let plug in the formula

Break Even Point=155,000 / (26 - 13)

Break Even Point=155,000/13

Break Even Point= 11,923 units

Inconclusion the break-even point is 11,923 units.

Learn more about Break Even Point here:brainly.com/question/21137380