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Question

question: net income of $46930 targeting sales of 740000, variable costs of 259 000 and fixed costs of 11, 700. based on this information, what is the total revenue at the break even 

Answer 1

Revenue = Fixed Cost + Variable Cost + Profit

= $11,700 + $259,000 + $46,930 = $317,630

 

Variable cost per unit = $259.000 / 740,000 units = $0.35 / unit

Sales price: $317,630 / 740,000 = $0.43 / unit

 

The break even point occurs where profit equals zero. Therefore

 

$.043 X = $11,700 + $0.35X + $0

$.08 X = $11,700

X = $11,700 / $.08 = 146,250 units.