# Breakeven point and profit

#### kiley1018

##### New member
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

##### Super Moderator
Staff member
Could the required profit be regarded as an additional "cost"...?

Eliz.

#### Subhotosh Khan

##### Super Moderator
Staff member
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

##### New member
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 ##### Super Moderator Staff member 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.