Pierce Medical Scrubs Enterprises gave the following results from a recent period, when they sold 10,000...
Pierce Medical Scrubs Enterprises gave the following results from a recent period, when they sold 10,000 units:
- Sales: $420,000
- Fixed costs: $185,000
- Variable costs: $170,000
- Net income: $65,000
The break-even point in unit sales for Pierce is:
Homework Answers
Firstly we have to calculate contribution margin per unit
=(sales-variable cost)/no. Of units sold
=(420000-170000)/10000
=$ 25 per unit
Break even units = fixed cost/contribution margin per unit
= 185000/25
= 7400 units
Thus the break even units = 7400 units
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