Break even point ( units of the product needs to be sold to achieve a profit )
A company is selling a product at a price of RM40 per unit. Variable cost per unit is RM22 while fixed costs is RM77,000. How many units have to be sold to achieve break-even point?
Price Per Unit (p):RM40
Variable Cost Per Unit (v):RM22
Fixed Costs (FC):77000
x = FC/(p-v)
x = 77000/(40 - 22)
x = 4277.78
Therefore,you will have 4278 units in order to break even point.
ii) How many units of the product needs to be sold to achieve a profit of RM11,000?
How to calculate it ?
Please Help me..
Re: Break even point ( units of the product needs to be sold to achieve a profit )
You make (p-v) on each item. It costs FC to make a batch of however many items you make.
Originally Posted by mastermin346
Profit = (p-v)*N - FC
11000 = (40-22)*N - 77000
88000 = 18*N
N = 88000/18 = 4888.89 so you must sell 4889 items.