Breakeven point and profit

kiley1018

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What is the breakeven point for a product with a selling price of $50, average variable costs of $30, and related fixed costs of $37,500? What impact would a $5 per unit profit requirement have on the breakeven point?

Breakeven point is – The breakeven point would be to sell 750 units and cost would be $93,750.

I have no idea how to find out what the dollar amount would be if there were a $5.00 profit on this. Is my breakeven point correct??
 

stapel

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Could the required profit be regarded as an additional "cost"...?

Eliz.
 

Subhotosh Khan

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kiley1018 said:
What is the breakeven point for a product with a selling price of $50, average variable costs of $30, and related fixed costs of $37,500? What impact would a $5 per unit profit requirement have on the breakeven point?

Breakeven point is – The breakeven point would be to sell 750 units and cost would be $93,750.

I did not get the same answer. Please show your work.
I have no idea how to find out what the dollar amount would be if there were a $5.00 profit on this. Is my breakeven point correct??
 

kiley1018

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This is what I did for the break even point

$37,500 / 50 = 750 units

$37,500 / 1-(30/50) = $37,500 / .4 = $93,750

Maybe this is not right - I tried following the book but it really does not make sense to me.
I have no idea whatsoever on how to get the $5 profit and figure that one out.
 

Subhotosh Khan

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kiley1018 said:
This is what I did for the break even point

$37,500 / 50 = 750 units<-- where did you get this equation?

You are dividing "fixed cost" only by "price per unit" - that does not follow from the definition of breakeven point.

How does your textbook define the "breakeven point"?


$37,500 / 1-(30/50) = $37,500 / .4 = $93,750

Maybe this is not right - I tried following the book but it really does not make sense to me.
I have no idea whatsoever on how to get the $5 profit and figure that one out.
 
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