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Homework answers / question archive / A firm has fixed operating costs of $425,000, a per unit sales price of $38, and a variable cost per unit of $21
A firm has fixed operating costs of $425,000, a per unit sales price of $38, and a variable cost per unit of $21. A. How many units must they sell to breakeven? B. How many units do they need to sell in order to reach a profit of $250,000
a. Break even point = Fixed costs / Contribution per unit = 425000 / (38 -21) = 25000 units
b. Desired sales (units) = Profit + Fixed cost / Contribution per unit = ( 425000+250000) /(38-21) = 39706 units
