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Kennish Company sold 5,130 units for $50 each. Variable costs were $26 per unit and total...

Kennish Company sold 5,130 units for $50 each. Variable costs were $26 per unit and total fixed expenses were $29,250.

What is the breakeven in terms of units for Kennish?

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Answer #1

Break even point in unit

Break even point in unit can be computed by dividing fixed by contribution margin per unit

Contribution margin per unit = selling price - variable cost

Variable cost of Kennish company is $26 per unit

Kennish fixed cost is $29,250

Kennish company selling price is $50

Units sold by kennish 5,130 units

Contribution margin per unit = 50 - 26 = $24

$24 is the contribution margin per unit of Kennish Company

The following is the formula for computing break even point in unit

Break even point in unit = fixed cost / contribution margin per unit

Break even point in unit of Kennish company

    = 29,250 / 24 = 1,218.75 units

1,218.75 units need to sell by Kennish company to get break even.

Break even in term of units for Kennish is 1,218.75 units.

5,130 units sold by Kennish are not required

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