Asked by Robert Grady on Jun 16, 2024
Verified
Assume a company sells a given product for $95 per unit.Variable selling costs are $24.25 per unit and variable production costs are $53.50 per unit.If the company breaks even when selling 260,000 units,what are total fixed costs?
Variable Selling Costs
Expenses that vary directly with the volume of sales, including commissions and shipping fees.
Variable Production Costs
Expenses that fluctuate in direct proportion to production volume, like labor and materials.
Break-even
The point at which total cost and total revenue are equal, meaning there is no net loss or gain.
- Calculate break-even points and understand their significance in business decision-making.
Verified Answer
BB
Bukky BakareJun 18, 2024
Final Answer :
$95 - $24.25 - $53.50 = $17.25 contribution margin per unit
$17.25 × 260,000 units = $4,485,000 total fixed costs
$17.25 × 260,000 units = $4,485,000 total fixed costs
Learning Objectives
- Calculate break-even points and understand their significance in business decision-making.