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deezerdoo · May 31, 2007, 05:08 AM

Here is my question and how I tried to answer it

Assume fixed cost equal $300,000. The price per unit equals $10 and the variable cost per unit equals $7. Find the breakeven point in terms of both units sold and sales revenue.

$300,000 divided by $10= 30,000 units
$300,000 divided by $7= 42,857.14 sales revenue

ebaines · May 31, 2007, 09:08 AM

The breakeven point is when the money you take in equals the money you had to pay out. Inother words, when revenue = variable cost + fixed cost. If you sell X units, the revenue is 10X and the costs are 7X +300000. Solve for X.

Another way to look at it is that break even occurs when gross margin equals fixed cost. Here gross margin per unit is $3/unit. How many units X do you need to sell for $3X = fixed cost?

majidhoney · Jun 3, 2009, 08:54 AM

At the breakeven point:

majidhoney · Jun 3, 2009, 08:55 AM

A completed CVP graph will show that profit or loss at any level of sales is measured by:
(a) A vertical line between the fixed cost line and the x axis.
(b) A horizontal line between the revenue line and the y axis.
(c) A vertical line between the total revenue line and the total expenses line.
(d) A horizontal line between the total revenue line and the total expenses line.

morgaine300 · Jun 4, 2009, 01:08 AM

We aren't here to just answer the homework questions for you. Especially multiple choice since they can easily be a test. You need to make some attempt at doing this yourself first, and since it's multiple choice, why you picked that choice would be nice too.

Also, you need to put new questions into a new thread instead of tagging onto the back of a completely different question.