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DeLong Inc. has fixed operating costs of $470,000, variable

Resolved Question:

DeLong Inc. has fixed operating costs of $470,000, variable costs of $2.80 per unit produced, and its products sell for $4.00 per unit. What is the company's breakeven point, i.e., at what unit sales volume would income equal costs?
Submitted: 5 years ago.
Category: Finance
Expert:  RD replied 5 years ago.

Contribution is Selling price minus variable cost = $4-$2.80=$1.20

 

Company breakeven point = $470000/$1.20 = 391666.7 units = appx. 391667 units

RD, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience: MBA, CPA
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