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Clothes company produce suites the variable cost to make each one is $20 each and sells them for $30 each. The cost to rent for the factory is $400. How many suits the company should sell to break-even point?

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facundobuzzetti

Answer:

Break-even point in units= 40

Step-by-step explanation:

Giving the following information:

Unitary variable cost= $20

Selling price per unit= $30

Fxed costs= $400

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

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

Break-even point in units= 400 / (30 - 20)

Break-even point in units= 40