Bentley Plastics Ltd. has annual fixed costs of $450,000 and variable costs of $15 per unit. The selling price per unit is $25.
a) What annual revenue is required to break even?
b) What annual unit sales are required to break even?
c) What will be the annual net income at annual sales of: (i) 50,000 units? (ii) $1,000,000?
d) What minimum annual unit sales are required to limit the annual loss to $20,000?
e) If the unit selling price and fixed costs remain the same, what are the changes in break-even unit sales and break-even revenue for a $1 increase in variable costs?

Question

Quizplus · Accepted Answer

The Answer of Bentley Plastics Ltd. has annual fixed costs of $450,000 and variable costs of $15 per unit. The selling price per unit is $25.
a) What annual revenue is required to break even?
b) What annual unit sales are required to break even?
c) What will be the annual net income at annual sales of: (i) 50,000 units? (ii) $1,000,000?
d) What minimum annual unit sales are required to limit the annual loss to $20,000?
e) If the unit selling price and fixed costs remain the same, what are the changes in break-even unit sales and break-even revenue for a $1 increase in variable costs?