breakeven point

This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
April 20, 2015 at 1:16 pm #241911
bibek
Member
- Topics: 5
- Replies: 7
The equation representing the total weekly costs (TC) in $ for an organization is as follows:
TC= 525,000+35Q

Where Q represents the weekly production and sales in units. The organization’s contribution to sales ratio is 30%.
What is the weekly breakeven point (in units)?
April 20, 2015 at 1:55 pm #241923
John Moffat
Keymaster
- Topics: 57
- Replies: 54851
Please do not simply set me a question – say what you problem is!
(I assume that the book in which you found the question also has the answer, so there is not much point in me simply saying that the answer is 35,000 units!!)

You know what the fixed costs are (525,000).
You know what the variable costs are (35 per unit) and that therefore the contribution per unit is 35 x 30/70 = 15 per unit

So the breakeven units must be 525,000/15
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.