Question

The New Age Pet Store sells Diva Doggie pet waste disposal systems for $50 each. The systems include the unit and a one-year supply of enzyme digester waste terminator. The cost of the unit and enzyme is $35. The only other costs are fixed costs of $3,000. During the current period, New Age sold 600 of the units through the store’s new on-line catalog division.

breakeven points in units:

breakeven points in $:

Answer 1

Break-Even point in unit = Fixed costs / (Price per unit - Variable costs)

Break-Even point in unit = $3,000 / ($50-$35)

Break-Even point in unit = 200 Units

Break Even Sales in Dollars = Break even point in unit * Price per unit

Break Even Sales in Dollars = 200 * $50

Break Even Sales in Dollars = $10,000

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