Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expenses totaled $12,000 and fixed administrative expenses totaled $32,000. The price per calendar is $15. What is the break-even point in units?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ocean Company makes calendars. Information on cost per unit is as follows:
Direct materials
$1.50
Direct labor
1.20
Variable overhead
0.90
Variable marketing expense
0.40
Fixed marketing expenses totaled $12,000 and fixed administrative expenses totaled $32,000. The
price per calendar is $15. What is the break-even point in units?
Transcribed Image Text:Ocean Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expenses totaled $12,000 and fixed administrative expenses totaled $32,000. The price per calendar is $15. What is the break-even point in units?
Expert Solution
Step 1

Break Even Point refers to the point in which total costs and total revenues are equal. When your company is at break even point which shows, your business does not have profit. But it also does not have a loss. 

In simple terms, Break Even Point means No Profit No Loss.

 

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