Flower Art has increased its selling price to $25.All other costs remain constant (variable costs $15 per pot and fixed costs $40,000).The number of pots that have to be sold to break even is:

Question

Quizplus · Accepted Answer

To calculate the break-even point, use the following formula:

Break-even point = Fixed Costs / (Price per unit - Variable costs per unit)

Here, the fixed costs are $40,000, the variable costs are $15 per pot, and the selling price is $25.

Break-even point = 40,000 / (25-15)
Break-even point = 4,000

Therefore, the company needs to sell 4,000 pots to break even.

Flower Art Has Increased Its Selling Price to $25