Benny Books sells first edition books.Benny purchases the books from his supplier for $100 a book and sells them through his website for $225 a book.Benny's fixed costs are $87,000.What is Benny's breakeven point in books?

Question

Quizplus · Accepted Answer

Benny's contribution margin (selling price - variable cost) is $225 - $100 = $125 per book.

To calculate the breakeven point, we divide the total fixed costs by the contribution margin:

Breakeven Point = Fixed Costs / Contribution Margin
Breakeven Point = $87,000 / $125
Breakeven Point = 696

Therefore, Benny's breakeven point in books is 696.

Benny Books Sells First Edition Books