Banta Corporation is in the business of selling computers.The following expenses were incurred in March 2017:
$\begin{array}{ll}
\text { Fixed manufacturing costs } & \$ 90,000 \
\text { Fixed nonmanufacturing costs } & \$ 55,000 \
\text { Unit selling price } & \$ 1,500 \
\text { Variable manufacturing cost } & \$ 800 \
\text { Units produced } & 1,600
\end{array}$
What will be the breakeven point if variable costing is used? (Round your final answer up to the next whole unit. )

Question

Quizplus · Accepted Answer

The breakeven point in units using variable costing is calculated by dividing total fixed costs by the contribution margin per unit. Contribution margin per unit is the selling price minus variable costs per unit. Here, the contribution margin is $1,500 - $800 = $700. Total fixed costs are $90,000 (manufacturing) + $55,000 (nonmanufacturing) = $145,000. Breakeven point = $145,000 / $700 = 207.14, rounded up to 208 units.

Banta Corporation Is in the Business of Selling Computers What Will Be the Breakeven Point If Variable Costing Is