A company makes cellular phones that sell for $100 each.  Direct materials costs are $35 per unit and direct labor is $30 per unit.  The company has fixed manufacturing costs of $400,000 per year and fixed selling costs of $200,000 per year.  The company pays a $5 per phone commission to their salespersons.

1.    What is the company's break even point in units? 

2.  What is the company's break even point in dollars?  

3.     How many phones would have to be sold to earn pretax income of $300,000? 

Answer rating: 100% (QA)

1 Breakeven point in units The breakeven point BEP in units is the number of units a company needs t... View the full answer