Posted by Peggy 10 months ago In:

,

Peggy
Peggy Asked:

Break Even

The production of a brand of toothpaste requires a fixed cost of $480,000.  The variable cost per unit is $2.00.  If 80,000 toothpastes will be sold during the next month, what sale price must be chosen in order to break even at the end of the month?

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PGroot
PGroot Answered:

80,000 x $2 = $160,000 variable cost, plus $480,000 fixed cost, total $640,000, divided by 80,000 gives $8 per unit to break even.

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OronD
OronD Answered:

If the sales price to get even is X the equation is: 
480,000 + 80,000 * 2 = 80,000 * X     (divide both sides by 80,000 to get:)
6 +2 = X
X = 8 $

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