BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

Solutions

Chapter
Section
BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

BREAK-EVEN ANALYSIS A company’s fixed operating costs are $500,000, its variable costs are $3.00 per unit, and the product’s sales price is $4.00. What is the company’s break-even point; that is, at what unit sales volume will its income equal its costs?

Summary Introduction

To identify: The break-even point.

Break-Even Analysis:

Break-even point refers to that amount, which doesn’t have an outcome of profit or loss and the difference of total revenue and expense is zero. Break-even analysis helps to find that level of sale through which the company can recover its cost and have no loss.

Explanation

Given,

The fixed cost is $500,000.

The sales price per unit is $4.

The variable cost per unit is $3.

Formula to calculate the break-even point,

Break-evenpoint=Fixedcost(SalespriceperunitVariablecostperunit)

Substitute $500,000 for fixed cost, $4 for sales price per unit and $3 for variable cost per unit

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

NONANNUAL COMPOUNDING a. You plan to make five deposits of 1,000 each, one every 6 months, with the first payme...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

In what ways is economics a science?

Essentials of Economics (MindTap Course List)

Flat files limit data integration. Explain.

Accounting Information Systems