Southwest Industries produces a sports glove that sells for £15 per pair. Variable expenses are £8 per pair and fixed expenses are £35,000 annually.
The break-even point for Southwest industries is

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the total fixed expenses by the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable expenses per unit (£15 - £8 = £7). Therefore, the break-even point is £35,000 / £7 = 5,000 pairs.

Southwest Industries Produces a Sports Glove That Sells for £15