Break-Even Analysis

Feet-First Industries plans to sell 7,750 sleds at $70 each in the coming year. Variable cost is 60 percent of the sales price. Fixed factory overhead equals $46,140 and fixed selling and administrative expense equals $34,780.

a. Calculate the units that Feet-First must sell in order to break even.

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b. Calculate the sales revenue that Feet-First must earn to break even by using the contribution margin.

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c. Confirm your answer in requirement b, by muliplying the number of break-even units in requirement a by the unit sales price.

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