Eagle Co sells T-shirts.If the sales price per shirt is $10,the variable production costs are $3.00 per shirt and the fixed costs are $21,000 p.a.,calculate the break-even point in sales dollars.

Question

Quizplus · Accepted Answer

The break-even point can be calculated as follows:
Break-even point (in units) = Fixed costs / (Sales price per unit - Variable costs per unit)
= $21,000 / ($10 - $3)
= 3,000 units
Break-even point (in sales dollars) = Break-even point (in units) x Sales price per unit
= 3,000 x $10
= $30,000
Therefore, the break-even point in sales dollars is $30,000. Therefore, the best choice is option B.

Eagle Co Sells T-Shirts