Question

Lester Co. produces toy kites. It has a fixed cost of $62,150. If the selling price per unit is $9.50 and the variable cost per unit is $6.25, the breakeven point is:

Answer 1

each item sells for $9.50 and costs $6.25 to make

therefore, (9.50 - 6.25) is the profit per item

from there, divide the total fixed cost by the profit per item, to find the # of items needed to be sold to recuperate the original fixed cost