1) Calculate the break-even point in units and dollars [chapter 4, text} " a 2) Plot a Break-Even Chait 7 Ng Total Per Unit Perediina Sales (1000 units) a - “$50

Accounting Mar 12, 2021

1) Calculate the break-even point in units and dollars [chapter 4, text} " a
2) Plot a Break-Even Chait 7 Ng
Total Per Unit Perediina
Sales (1000 units) a - “$50.00 $50 a
Less: Variable costs 20,000 20 0
Contribution Margin 30.000 w *
Less: Fixed costs * 38,000
"| Net Income 5.000 . s .

Expert Solution

1) Computation of Breakeven Point in Units and Dollars:

Break even point in dollars = Fixed cost / Contribution margin = 25,000 / 60% = $ 41,667

Break even point in units = Break even point in dollar / Sale price per unit = 41,667 / 50 = 833.33 or 833 units

Table for plot

Q	Sale Value	Contribution	Fixed costs
	S = 50 x Q	C = 60% x S	FC
-	-	-	25,000
300	15,000	9,000	25,000
600	30,000	18,000	25,000
900	45,000	27,000	25,000
1,200	60,000	36,000	25,000

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