Question
Lets say the company found out they have to produce 140 000 units to break even. We know that variable costs per unit are 8580
Lets say the company found out they have to produce 140 000 units to break even. We know that variable costs per unit are 8580 dollars and selling price is 16500 dollars, we also know that total costs per unit are 13200 dollars and we need to find FIXED COSTS. Using break even point formula: BEP = Fixed costs/(revenue per unit - VC per unit) gives us the fixed costs 1108800000 dollars. However, dividing this by 140000 gives us 7920 dollars of fixed costs per unit, which in turn does not match the formula TC/unit=VC/unit+FC/unit, which in that case, FC should equal 4620 dollars / unit as 13200-8580=4620 WHY IS THAT?
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