A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $200 per unit. What is the break-even point for this operation

Answer and Explanation:

The computation of the break-even point for this operation is given below:

As we know that

Break even point is

= (Fixed cost) ÷ (Selling price per unit - variable cost per unit)

= ($9,000) ÷ ($200 - $50)

= $9,000 ÷ $150

= 60 units

The break even price is

= Fixed cost ÷ expected cost + variable cost per unit

= $9,000 ÷ $200 + $50

= $45 + $50

= $95

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