Mary is concerned with evaluating her business based on the break-even point. 

Last year, in her business with 550 sales (all of the same product), she had the following annual expenses:

Salary (flat rate): $50,000

Rent: $50 per unit sold

Utilities (flat rate): $8,000

This year, salary expenses are expected to increase 10% while all other expenses will increase 5%. Assuming last year's revenues of $96,250 are expected to increase 25% this year with no change to the per unit selling price of products sold, how will the break-even point change? What advice would you give Mary about solely evaluating business performance via the break-even point?

Answer rating: 100% (QA)

To calculate the breakeven point we first need to determine the total fixed costs and variable costs ... View the full answer