Question

prepared a break-even chart using the following information Sale Price $20.00 Variable costs $10.00 Fixed Costs...

prepared a break-even chart using the following information

Sale Price $20.00
Variable costs $10.00
Fixed Costs $20,000.00
Business   Accounting   
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Homework Answers

Answer #1
  • Sales price – Variable cost = Contribution margin
    = $ 20 - $ 10 = $ 10
  • Break even units = Fixed Cost / Contribution margin
    =$ 20000 / $ 10
    = 2,000 units
  • Break even sales = 2000 units x $ 20 = $ 40,000
  • Chart data

Units sold

Sales Revenue

Variable cost

Fixed Cost

Net Income

500

$10,000

$5,000

$20,000

($15,000)

1000

$20,000

$10,000

$20,000

($10,000)

1500

$30,000

$15,000

$20,000

($5,000)

2000

$40,000

$20,000

$20,000

$0

2500

$50,000

$25,000

$20,000

$5,000

3000

$60,000

$30,000

$20,000

$10,000

3500

$70,000

$35,000

$20,000

$15,000

4000

$80,000

$40,000

$20,000

$20,000

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