Question

Concord reported the following information for the current year: Sales (49000 units) $980000, direct materials and direct labor $490000, other variable costs $49000, and fixed costs $360000. What is Concord’s break-even point in units?
a.36000.
b.32727.
c.56903.
d.40000.

Answer 1

Answer:

Concord BEP: 400,000 units

Explanation:

Break Even Point (Units) = Fixed Cost / (Selling Price - Variable Cost) or

Break Even Point (Units) = Fixed Cost / Contribution Margin

Concord Break Even Point:

Contribution Margin Per Unit: (($980,000 - ($490,000 + $49,000)) / 49,000 =  $9

Concord BEP: $360,000 / $9 = 400,000 units