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Break-Even Point Nicolas Inc. sells a product for $62 per unit. The variable cost is $38...

Break-Even Point

Nicolas Inc. sells a product for $62 per unit. The variable cost is $38 per unit, while fixed costs are $69,120.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $68 per unit.

a. Break-even point in sales units units
b. Break-even point if the selling price were increased to $68 per unit units
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Homework Answers

Answer #1

a. Break-even point in sales units

  Contribution per unit = Selling price – Variable cost per unit

= $62 - $38

= $24 per unit

Break-even point in unit sales = Fixed costs / Contribution per unit

= $69,120 / $24 per unit

= $2,880 units

b. Break-even point if the selling price were increased to $68 per unit

    Contribution per unit = Selling price – Variable cost per unit

= $68 - $38

= $30 per unit

Break-even point in unit sales = Fixed costs / Contribution per unit

= $69,120 / $30 per unit

= $2,304 units

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