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Math Help - Break even point ( units of the product needs to be sold to achieve a profit )

  1. #1
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    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..
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  2. #2
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    Re: Break even point ( units of the product needs to be sold to achieve a profit )

    Quote Originally Posted by mastermin346 View Post
    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..
    You make (p-v) on each item. It costs FC to make a batch of however many items you make.

    Profit = (p-v)*N - FC

    11000 = (40-22)*N - 77000

    88000 = 18*N

    N = 88000/18 = 4888.89 so you must sell 4889 items.
    Thanks from mastermin346
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