break-even point in units
You are the Chief Financial Officer of Max Gifts Company. A small company that sells Italian Memorabilia which are (1) snow globes with boats and (2) snow globes with buildings inside. The company's August 2021 sales and expenses are provided below:
Boats Globe Building Globe
Sales $20,000 $80,000
Variable Cost $15,000 $40,000
No. Momorabilia sold 200 1000
Sales Mix 20% 80%
Monthly Fixed costs are $37,000.
Required:
c. Compute the break-even point in units for the company.
| Particulars | Boats Globe | Building Globe |
| Sales | $20,000 | $80,000 |
| Less Variable Cost | $15,000 | $40,000 |
| Contribution (A) | $5,000 | $40,000 |
| Number of units sold (B) | 200 | 1,000 |
| Contribution per unit (C = A/B) | $5,000/200 = $25 | $40,000/1,000 = $40 |
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