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    Jtchnn70's Avatar
    Jtchnn70 Posts: 3, Reputation: 1
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    #1

    Oct 26, 2011, 11:53 AM
    How to find the breakeven sale in dollars?
    How do you find the breakeven sales in dollars? The given selling price per pound is $20, Variable costs are $12 per pound, and total fixed costs $ 6000.
    adityah's Avatar
    adityah Posts: 3, Reputation: 2
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    #2

    Oct 28, 2011, 12:48 PM
    Selling Price is $ 20 per unit. Variable cost $ 12 per unit. Therefore, contribution (i.e Sales price less variable cost) is $ 8 per unit. Now, divide fixed cost of $ 6000 by contribution of $ 8 per unit. You get 750. It means, you need to sell 750 units to break even. In other words, revenue from sales must be $ 15000 (750 units x $ 20 per unit).

    Now let us understand the concept. Every unit gives profit of $ 8 (20-12)before fixed cost. You need to recover fixed cost of $ 6000. If one unit gives $ 8, how many units will be equal to $ 6000 ? The answer is 6000/8=750.
    Jtchnn70's Avatar
    Jtchnn70 Posts: 3, Reputation: 1
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    #3

    Oct 28, 2011, 10:33 PM
    You're right. I agree with your answer.

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