Answer:
Break-even point in units= 12,000
Explanation:
Giving the following information:
Selling price= $20 per unit
Fixed expenses= $96,000
Last year, the company's sales revenue was $300,000, and its net operating income was $24,000.
First, we need to calculate the unitary variable cost:
Units sold= 300,000/20= 15,000
Total variable cost= 300,000 - 24,000 - 96,000
Total variable cost= 180,000
unitary variable cost= 180,000/15,000= $12
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 96,000 / (20 - 12)
Break-even point in units= 12,000
