Question

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $38.92. The variable cost per unit is $27.38, Poseidon Swim has average fixed costs per year of $25,880.

Answer 1

Variable cost per unit					$27.38
Fixed Costs per year					$25,880.00
Selling price Per unit					$38.92
Contribution= Selling price - Variable cost
	. = 38.92 - 27.38
	$11.54
Break even volume = Fixed Cost/Contribution per unit
.                                  25880 / 11.54
	2242.634	units	or 2243 units
Break volume Sales is 2243 units. As units cannot be fraction, so it will be round up.