Lombardi Ltd has a unit selling price of ($400,) variable costs per unit of ($240) and fixed
Question:
Lombardi Ltd has a unit selling price of \($400,\) variable costs per unit of \($240\) and fixed costs of \($160\) 000. Calculate the break-even point in units using
(a) a mathematical equation and
(b) contribution margin per unit.
Reasoning
The mathematical equation is Break-even sales = Variable costs + Fixed costs. Using contribution margin per unit, the formula is Fixed costs ÷ Contribution margin per unit = Break-even point in units.
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Related Book For
Financial Accounting Reporting, Analysis And Decision Making
ISBN: 9780730363279
6th Edition
Authors: Shirley Carlon
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