Break-even analysis: Trident Ltd makes designer gold bracelets. Their annual costs include shop rent of $12,500, salaries for two jewellers of $118,000, design software costs of $10,000, and other overhead costs of $13,000. An average bracelet is priced at $5,500. It costs $2,000 in raw material, $1,250 in labour, and $250 in other expenses. What is the minimum number of bracelets that need to be sold to earn a profit?

Question

Quizplus · Accepted Answer

The total cost of producing one bracelet is $2,000 + $1,250 + $250 + ($12,500 + $118,000 + $10,000 + $13,000) / 5,500 = $3,500. So, the minimum number of bracelets that need to be sold to earn a profit is 77.

Break-Even Analysis: Trident Ltd Makes Designer Gold Bracelets