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Break-Even Point
Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are
$48,000.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price
were increased to $95 per unit.a. Break-even point in sales units unitsb. Break-even point if the
selling price were increased to $95 per unit units
Solution
a ) BEP (units) = Fixed cost / (selling price -variable cost per unit)
= 48,000 / (75-45)
= 48,000/ 30
= 1600 units
B)BEP = 48,000 /(95 -45)
= 48,000 / 50
= 960 units

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Break-Even PointElrod Inc. sells a product for $75 per unit. The v.pdf

  • 1. Break-Even Point Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are $48,000. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $95 per unit.a. Break-even point in sales units unitsb. Break-even point if the selling price were increased to $95 per unit units Solution a ) BEP (units) = Fixed cost / (selling price -variable cost per unit) = 48,000 / (75-45) = 48,000/ 30 = 1600 units B)BEP = 48,000 /(95 -45) = 48,000 / 50 = 960 units