Answered: Riz compaany sold gum for $10 per pack.…

Riz compaany sold gum for $10 per pack. Variable costs were 40% of selling price, fixed costs totaled $36,000. Profit $6000. What is break-even point? a. $7000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Riz compaany sold gum for $10 per pack. Variable costs were 40% of selling price, fixed costs totaled $36,000. Profit $6000. What is break-even point?

a. $70000

b. $60,000

$90,000

$105000

Expert Solution

Step 1

Variable Cost - The total cost of production of a good comprises of the total fixed cost of production and the total variable cost of production. The total variable cost of production refers to the production cost that changes with the change in the units of the product produced.

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