Eagle Co sells T-shirts. If the sales price per shirt is $10, the variable production costs are $3.50 per shirt and the fixed costs are $22,000 p.a., calculate the break-even point in sales dollars.

Question

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the formula:

Break-even point = Fixed Costs / (Sales Price per unit - Variable Costs per unit)

Substituting the values, we get:

Break-even point = 22000 / (10-3.5)
= 22000 / 6.5
= 3384.6

Rounding up, the break-even point in sales dollars is $33,846, which is option B.

Eagle Co Sells T-Shirts