Question

therapeutic systems sells its products for $19 per unit. it has the following cost: Rent: $175000...

therapeutic systems sells its products for $19 per unit. it has the following cost:
Rent: $175000
Factory labor: $7.00 per unit
Executives under contract: $289100
Raw material: $1.80 per unit

seperate the expenses between fixed and variable costs per unit. using this information and the sales price per unit of $19, compute the break even point.
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Answer #1

ANSWER = 45,500 UNITS

Total fixed cost = Rent + Executives under contract

Total fixed cost = $175000 + $289100

Total fixed cost = $464100

Variable cost per unit = Factory labor + Raw material

Variable cost per unit = $7.00 + $1.80

Variable cost per unit = $8.80

Selling price per unit = $19.00

Contribution per unit = Selling price per unit - Variable cost per unit

Contribution per unit = $19.00 - $8.80

Contribution per unit = $10.20

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