Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

Transcribed Image Text:6. Longstreet Inc. has fixed operating costs of $370,000, variable costs of $2.80 per unit produced, and its product sells for
$4.00 per unit. What is the company's break-even point, i.e., at what unit sales volume would income equal costs?
а. 240,500
b. 357,667
с. 336,083
d. 308,333
e. 366,917
Expert Solution

Step 1
Break-even point is that point where profit or loss of the company is zero which means that the revenue earned by the company will be equal to the cost incurred by the company.
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