Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonthly fixed costs are $500,000. What is the breakeven point for your company, in units and in sales.
Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and total
monthly fixed costs are $500,000. What is the breakeven point for your company, in units and in sales.
Compute breakeven units for the company as shown below:
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Fixed cost Breakeven point (In units) Sale price per unit -Variable cost per unit $500,000 $10,000-$6,000 = 125 Units
Compute breakeven point in sales dollar...
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Sale price Variable cost Contributi on margin ratio Sale price $10,000-$6,000 $10,000 = 40% Now, compute breakeven point in sales dollars using contribution margin ratio Fixed cost Breakeven point (In dollars) Contribution margin ratio $500,000 40% - $ 1,250,000
Business
Accounting
Cost Accounting
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