The following information relates to a company, which produces a single product

direct labour per unit $22

direct materials per unit $12

variable overheads per unit $6

fixed costs $400,000

selling price per unit $60

1.Define the term 'break-even'.

2.Use the figures above to construct a break-even chart showing the minimum number of units that must be sold for the company to break even. Fully label your diagram.