Farris Billiard Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production manager, is currently investigating the production of a standard house pool cue that should be very popu- lar. Upon analyzing the costs, Mysti determines that the materials and labor cost for each cue is $25, and the fixed cost that must be covered is $2,400 per week. With a selling price of $40 each, how many pool cues must be sold to break even

Respuesta :

Answer:

Break-even point in units= 160 units

Explanation:

Giving the following information:

Unitary variable cost= $25

Selling price per unit= $40

Fixed costs= $2,400

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= 2,400 / (40 - 25)

Break-even point in units= 160 units