[Janetteacher5]

I came across this in one of my text books which I don't have the answer for:

A company makes a single widget and sells it for $20 per unit. The company's annual fixed expenses are $1,500 and the variable expenses of manufacturing and selling the widget are $15 dollars. How do we come up with the break even point in terms of Sales Dollars?

[Just Looking]

A company has broken even when its total revenue equals it total expenses. You can compute the break even units in your example with the following equation:

Breakeven point = Fixed costs/ (unit selling price-unit variable costs)

This gives you the number of units you need to make, and if you multiply the number of units by the unit selling price, you can get your revenue number.