Break-even analysis. IronVerks Ribshack has total fixed costs of $8,500 per month. It sells rib plates for $15 each, and the variable cost of providing each plate is $10. What is the pretax operating cash flow break-even point for IronVerks?
A) 567 plates
B) 1,700 plates
C) 8,500 plates
D) None of the above

Question

Quizplus · Accepted Answer

Break-even point can be calculated using the formula:

Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)

Substituting the given values, we get:

Break-even point = $8,500 / ($15 - $10) = 1,700 plates

Therefore, the pretax operating cash flow break-even point for IronVerks is 1,700 plates, which is option B.

Break-Even Analysis