What is unit operations?

The following data pertain to last month's operations: Selling price $ 40 per unit Variable pr?

• The following data pertain to last month's operations: Selling price $ 40 per unit Variable production cost $ 3 per unit Fixed production cost $77,000 Variable selling & admin. expenses $ 5 per unit Fixed selling & admin. expenses $33,000 The break-even point in dollars is: (Do not round intermediate calculations.)

• Answer:

  Variable costs per unit = ( $3 + $5 ) = $ 8 per unit Contribution margin per unit = (Selling price per unit - variable costs per unit) = ( $ 40 - $ 8 ) = $ 32 Total fixed costs = ( $ 77,000 + $ 33,000 ) = $ 110,000 To break-even, need total contribution margin to equal total fixed costs. Let x be number of units sold Need 110,000 = 32x x = (110,000 / 32) = 3,437.5 So they need to sell 3,438 units to break-even. In dollars, the break-even point is (3,438 x $ 40) = $ 137,520 ~~~~~~~~~ Note: I DID round the 3,437.5 number up to 3,438 because there is no such thing as half a unit. If this causes a problem with your answer, I suppose you can recalculate the last line using 3,437.5 instead of 3,438 .