Question

A firm has fixed expenses of $3,500 per month and will sell its product for $30.00....

A firm has fixed expenses of $3,500 per month and will sell its product for $30.00. Variable expenses are $28.00 per unit.

            How many units must be sold for the firm to break even?

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Answer #1
Calculation of break even point:
Break even point= Fixed cost/ contribution per unit
Contribution per unit= sale price- variable cost per unit
                                            = 30-28=$2
Break even point=3500/2=1750
Break even point is 1750 units
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