Tom’s Trashbins, Inc. has fixed costs of $225,000. - 4553

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Tom’s Trashbins, Inc. has fixed costs of $225,000. Tom’s trashbins sell for $45 and have a unit variable cost of $20. What is Tom’s break-even point in units?

a.8,500

b.8,750

c.9,000

d.9,250

Break-even analysis is an evaluation technique for which the objective is to determine the volume of production yielding no profits or losses. The break-even point is determined by Fixed costs/(Selling price – Variable cost).

 
Solution Description

Tom’s Trashbins, Inc. has fixed costs of $225,000. Tom’s trashbins sell for $45 and have a unit variable cost of $20. What is Tom’s break-even point in units?