Question

A fruit processor manufactures and sales a single product.the company's total sales, variable cost and fixed cost are $ 60000, $420000 and $150000 respectively. if the unit sellin\sqrt(g) price is $40. calculate the breakeven point the unit sold and total revenu.

Answer 1

a.

Break-Even point (units) = Fixed Costs $\div$ (Sales price per unit - Variable costs per unit)

variable cost per unit is = $\frac{\$420000}{no. of units}$

Units= $\frac{total sales}{selling price}$

=$\frac{\$600000}{40}$

=15000 units sold

so now the variable cost per unit is= $\frac{\$420000}{15000}=\$28$

breakeven in units

= $\frac{\$150000}{\$(40-28)}=12,500$ units

Total revenue:

=selling price per unit $\times$ total units sold

$=\$40 \times15000=\$600,000$