Question

# Break-Even Point Hilton Enterprises sells a product for \$115 per unit. The variable cost is \$76...

Break-Even Point

Hilton Enterprises sells a product for \$115 per unit. The variable cost is \$76 per unit, while fixed costs are \$357,435.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to \$123 per unit.

 a. Break-even point in sales units units b. Break-even point if the selling price were increased to \$123 per unit units

Target Profit

Trailblazer Company sells a product for \$245 per unit. The variable cost is \$105 per unit, and fixed costs are \$952,000.

Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of \$352,240.

 a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of \$352,240 units

Solution 1a:

Contribution margin per unit = Selling price - Variable cost = \$115 - \$76 = \$39 per unit

Break even point in sales units = Fixed costs / Contribution margin per unit = \$357,435 / \$39 = 9165 units

Solution 1b:

Contribution margin per unit = Selling price - Variable cost = \$123 - \$76 = \$47 per unit

Break even point in sales units = Fixed costs / Contribution margin per unit = \$357,435 / \$47 = 7605 units

Solution 2a:

Contribution margin per unit = Selling price - Variable cost = \$245 - \$105 = \$140 per unit

Break even point in sales units = Fixed costs / Contribution margin per unit = \$952,000 / \$140 = 6800 units

solution 2b:

Break-even point in sales units if the company desires a target profit of \$352,240 = (Fixed costs + Target profit) / CM per unit

= (\$952,000 + \$352,240) / \$140 = 9316 units

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