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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