Question

Rice company has a unit selling price of $520, variable costs per unit of $286, and fixed costs of $163,800. compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin

Answer 1

selling price = p = 520
variable cost per unit = vc = 286
fixed cost = fc = 163,800.
unit sold = x

520 * x = 286 * x + 163,800
520x = 286x + 163,8000
520x - 286x = 163,800
234x = 163,800

x = 163,800 / 234 = 700 units to reach break even point.
unit contribution margin = p - vc = 520 - 286 = 234 per unit.