Question
Vince Pty Ltd sells designer handbags. The manager is concerned about the profitability of the firm and would like to get advice on the number
Vince Pty Ltd sells designer handbags. The manager is concerned about the profitability of the firm and would like to get advice on the number of units they must sell in order to break even. He would like to ensure he would set a low-risk plan for the business. You are approached to advise the manager on break-even. The manager's question is as follows: If the sales price per handbag is $2,400, the variable production costs are $680 materials per handbag, and $220 labor per handbag, with fixed costs at $1,425,000 p.a.; what is the break-even point in sales dollars?
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