Ivey Inc. sells a product for $100 per unit. The variable cost is $75 per unit,

Question

Ivey Inc. sells a product for $100 per unit. The variable cost is $75 per unit, and fixed costs are $30,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $10,000. a. Break-even point in sales units: units b. Break-even point in sales units if the company desires a target profit of $10,000

Explanation / Answer

A)let it be t. Then cost = revenue =>30000+(75t) = 100t =>25t = 30000 =>t = 1200 units B)let it be t. profit = revenue-cost =>10000 = 100t-75t-30000 =>25t = 40000 =>t = 1600 units

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