Problem 20-3

Determine break-even point under varying assumptions (L.O. 3, 4)

The management of Bootleg Company wants to know the break-even point for its new line of hiking boots under each of the following independent assumptions. The selling price is $50 per pair of boots unless otherwise stated. (Each pair of boots is one unit.)

a. Fixed costs are $300,000; variable cost is $30 per unit.

b. Fixed costs are $300,000; variable cost is $20 per unit.

c. Fixed costs are $250,000; variable cost is $20 per unit.

d. Fixed costs are $250,000; selling price is $40; and variable cost is $30 per unit.

I need help trying to compute the break-even point in units and sales dollars for each of the four independent cases.