Define break-even and apply the break-even formula to the following figures to determine the number of units that must be produced to reach the break-even point.TFC = $424,000, SP = $6.00 VC/Unit = $2.00
What will be an ideal response?
Break-even is that volume of sales at which the business will neither make a profit nor incur a loss. Applying the break-even formula to the provided details results in the following:
Break-even quantity = $424,000 / ($6.00 - $2.00)
Break-even quantity = $424,000 / $4.00
Break-even quantity = 106,000 units
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