Jurassic Manufacturers produces flooring material. Fixed costs are $5 000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic managers create a CVP graph from volume levels of zero to 400 units, where will the revenue and total cost lines intersect?

Question

Quizplus · Accepted Answer

The revenue and total cost lines intersect at the break-even point. The break-even point in units is calculated as Fixed Costs / (Sales Price per Unit - Variable Cost per Unit) = $5,000 / ($50 - $30) = 250 units.

Jurassic Manufacturers Produces Flooring Material