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The following data are available for product no. CK74, manufactured and sold by Ruby Corporation:
Maximum capacity with present facilities 11,000 units
Total fixed cost (per period) $ 851,400
Variable cost per unit $ 120.00
Sales price per unit $ 186.00
Required:
The number of units of CK74 that Ruby must sell to break- even is:________.
a. 12,900.
b. 4,577.
c. 7,095.
d. 6,050.

Sagot :

facundobuzzetti

Answer:

Break-even point in units= 12,900

Explanation:

Giving the following information:

Total fixed cost (per period) $ 851,400

Variable cost per unit $ 120.00

Sales price per unit $ 186.00

To calculate the break-even point, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 851,400 / (186 - 120)

Break-even point in units= 12,900

Answer: 12900

Explanation:

From the information given, we'll first calculate the contribution per unit which will be:

= Selling price per unit - variable cost per unit

= $186 - $120

= $ 66

Then, the break even sales in units will be: = Fixed cost/Contribution per unit

= 851,400 / 66

= 12,900

Therefore, the breakeven is 12900

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