Brideep sells laminated posters for decorating bare college dorm walls. He pays $1,000 rent and a salary of $500 to himself. Variable cost per unit (including the poster paper and the laminate) is $9. At a selling price of $24.95 per poster, the break-even point in units is:

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the price per unit minus the variable cost per unit. Here, the total fixed costs are $1,000 (rent) + $500 (salary) = $1,500. The price per unit is $24.95, and the variable cost per unit is $9. So, the calculation is $1,500 / ($24.95 - $9) = $1,500 / $15.95 ≈ 94.04. Since you can't sell a fraction of a poster, rounding up gives 95 units to break even.

Brideep Sells Laminated Posters for Decorating Bare College Dorm Walls