Isla is a marketing manager for Marshall Manufacturing. Her boss has asked her to evaluate a new-product idea. One of the things Isla wants to determine is how much of this product her firm would have to sell in order to break even. In order to compute this break-even level of sales, she will need to know the price of the good, the total fixed costs, and variable cost of producing each unit.

Question

Quizplus · Accepted Answer

In order to compute the break-even point, Isla would divide the total fixed cost associated with producing the product by the difference between the price of the good and the variable cost of producing each unit.

Isla Is a Marketing Manager for Marshall Manufacturing