Help Save & Exi Owen Conner works part-time packaging software for a local distr

Question

Help Save & Exi Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $15,000 for this process, direct labor is $4.00 per package, and material is $5.00 per package. The selling price will be $15.00 per package. a. What is the break-even point in units? (Do not round intermediate calculations. Roundup your answer to the next whole number.) units b. How much revenue do we need to take in before breaking even? (Round your answer to the nearest dollar amount) " Prev 16 of 501: Next >

Explanation / Answer

Fixed cost = $15000

Variable cost per unit =$4 + $5 = $9 per unit

Selling Price = $15 per unit

Now, Let Break-even quantity be Q

Therefore, $15000 + $9Q = $15Q

=> $6 Q = $15000

=> Q = 2500 units

a) break even units = 2500

b) Break-even revenue = $15 *2500 = $37500

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