Break-Even Point Radison Inc. sells a product for $45 per unit. The variable cost is $30 per unit, while fixed costs are $21,600. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $54 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $54 pe
Break-Even Point Radison Inc. sells a product for $45 per unit. The variable cost is $30 per unit, while fixed costs are $21,600. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $54 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $54 pe
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Break-Even Point
Radison Inc. sells a product for $45 per unit. The variable cost is $30 per unit, while fixed costs are $21,600.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $54 per unit.
| a. Break-even point in sales units | units |
| b. Break-even point if the selling price were increased to $54 per unit | units |
Expert Solution
Step 1
Break even point is the point where company's fixed costs and contribution margin are equal which indicates there is neither profit nor loss for the business.
Formula:-
break even point = Fixed costs / Contribution margin per unit
Contribution margin per unit= selling price - variable cost per unit
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