Owen Conner works part time packaging software for a local distribution company in Indiana. The annual fixed cost is 10,000 for the process, direct labor is 3.50 per package, and material is 4.50 per package. The selling price will be 12.50 per package. How much revenue do we need to take in before even? What is the break even point in units?

1. What is the Break-even point in units? (Step-by-Step calculation is required)

2. How much revenue at break-even point? (Step-by-Step calculation is required)

• Extended questions (each is an independent case): It is required to have a brief explanation to your answer. The explanation could be through calculation or definition of break-even point.

3.If they sold 2000 units, would they gain or lose profit?

4.If they sold 3000 units, would they gain or lose profit?

5.If the fixed cost decreased by $1,000, would the break-even point be higher or lower?

6.If the direct labor cost increased by $1, would the break-even point be higher or lower?