Question
Break even in unit = Fixed Cost / (Seeling Price variable Cost) Break even in dollar = Fixed Cost / Contribution % Fixed Cost =
Break even in unit = Fixed Cost / (Seeling Price variable Cost)
Break even in dollar = Fixed Cost / Contribution %
Fixed Cost = Rent of Shop + Salaries + Advertising + other operating expenses.
Fixed Cost = $100000 + $80000 + $20000 + $61000
Fixed Cost = $261000
Variable Cost = Purchase Price + Salesmen Commission.
Variable Cost = 10.5 + 1.5
Variable Cost = $12
Contribution % = (selling price variable cost) / selling price
Contribution % = (30 12) / 30
Contribution % = (60% 30 12) / 30
Break even in unit = fixed cost / (selling price variable cost)
Break even in unit = 261000 / (30 12)
Break even in unit = 145000
Break even in $ = fixed cost / contribution %
Break even in $ = 261000 / 60%
Break even in $ = $435000
Company sold 20,000 pairs of shoes during the year, calculate the net profit/loss.
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