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following information is available:
sale price per unit=200
Variable cost per unit=50
actual number of units produced in current year=22000 units
fixed cost 1650000
stepped fixed cost is based on actual number of units produced. see the following information:
when production per annum is up to 20500 units= 488000
when production per annum is between 20500 units to 23000 units= 584000
required: break even point in unitsThis is not a BA1 topic, but I will indicate how to go about it using the information you have supplied:
Assume answer is up to 20500 units. Then FC =1,650,000 and stepped = 488000. Contribution per unit = 150 so BEP = (488,000 + 1,650,000)/150 = 11,325
At 11,325 the stepped costs we have used are correct so this answer is consistent with the data used to obtain it.
Please post any questions to the relevant forum for the paper.
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