What is the breakeven point, in dollars, for Zippy Dippy Swimwear, maker of bathing suits and accessories? It has the following costs: $\begin{array}{ll}
\text { Raw materials: } & \$ 25 \text { per bathing suit } \
& \$ 8 \text { per towel } \
& \$ 16 \text { per beach umbrella } \
& \$ 37 \text { per swimsuit cover-up }\
\text { Labor costs: } & \$ 18 \text { average per suit } \
& \$ 10 \text { per umbrella } \
& \$ 3 \text { per towel } \
& \$ 20 \text { per cover-up }\
\text { Commissions: } & \$ 12 \text { per item } \
\text { Utilities: } & \$ 150,000 \
\text { Rent: } & \$ 196,000 \
\text { Taxes: } & \$ 230,000 \
\text { Salaries: } & \$ 550,000
\end{array}$ The price of each suit is $85. The price of each towel is $25.
The price of each umbrella is $40.
The price of each cover-up is $81.
A) $3,172,023
B) $4,947,196
C) $7,887,259
D) $6,425,583

Question

What is the breakeven point, in dollars, for Zippy Dippy Swimwear, maker of bathing suits and accessories? It has the following costs: $\begin{array}{ll}
\text { Raw materials: } & \$ 25 \text { per bathing suit } \
& \$ 8 \text { per towel } \
& \$ 16 \text { per beach umbrella } \
& \$ 37 \text { per swimsuit cover-up }\
\text { Labor costs: } & \$ 18 \text { average per suit } \
& \$ 10 \text { per umbrella } \
& \$ 3 \text { per towel } \
& \$ 20 \text { per cover-up }\
\text { Commissions: } & \$ 12 \text { per item } \
\text { Utilities: } & \$ 150,000 \
\text { Rent: } & \$ 196,000 \
\text { Taxes: } & \$ 230,000 \
\text { Salaries: } & \$ 550,000
\end{array}$  The price of each suit is $85. The price of each towel is $25.
The price of each umbrella is $40.
The price of each cover-up is $81.
A) $3,172,023
B) $4,947,196
C) $7,887,259
D) $6,425,583

Quizplus · Accepted Answer

To calculate the breakeven point in dollars, we first need to determine the fixed and variable costs. Fixed costs include utilities, rent, taxes, and salaries, totaling $1,126,000 ($150,000 + $196,000 + $230,000 + $550,000). Variable costs per item include the sum of raw materials, labor costs, and commissions. For each bathing suit, the variable cost is $55 ($25 + $18 + $12), for each towel it's $21 ($8 + $3 + $12), for each beach umbrella it's $38 ($16 + $10 + $12), and for each swimsuit cover-up it's $77 ($37 + $20 + $12). Without the sales mix (the proportion of each product sold), we cannot precisely calculate the breakeven point for each product type. However, the question seems to be missing this crucial piece of information, making it impossible to accurately calculate the breakeven point based on the provided data. Therefore, the correct answer cannot be determined from the given information, suggesting a potential error in the question setup or a misunderstanding in the calculation process.

What Is the Breakeven Point, in Dollars, for Zippy Dippy