Jenna Manufacturers produces flooring material.The monthly fixed costs are $18,000 per month.The unit selling price is $85 and variable cost per unit is $40.If Jenna's managers create a CVP graph from volume levels of zero to 500 units,at what sales level (in units)will the revenue and total cost lines intersect?

Question

Quizplus · Accepted Answer

The break-even point is where total revenue equals total costs. The formula is Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Here, it is $18,000 / ($85 - $40) = 400 units.

Jenna Manufacturers Produces Flooring Material