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Minist Corporation sells a single product for $15 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in unit sales was:

Respuesta :

Answer:

12000 units

Explanation:

Given:

Selling price of a single product = $ 15

Sales revenue of the company = $ 225,000

Net operating income = $ 18,000

Fixed total expenses = $ 72,000

Now,

The number of units sold  = $ 225,000 / 15 = 15000

Operating income = Sales – variable cost – fixed cost

on substituting the value,

$ 18,000 = $ 225,000 – $ 72,000 – Variable cost

or

Variable cost = $ 225,000-72,000-18,000  = $ 135,000

Now, the variable cost for the single unit = $ 135,000 / 15000 = $ 9

thus,

Break even point = Total fixed cost/( Selling price – variable cost)per unit

or

Break even point = $ 72000 / ( $ 15 – $ 9)

or

Break even point = 12000 units

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