Warren Soft makes period pieces. The firm has total fixed costs of $500,000. The average piece is sold at a price of $2,500 and involves variable costs of $1,800 per unit. What is the break-even point for this firm? (Round to nearest whole unit.)

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated using the formula: Break-even point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: $500,000 / ($2,500 - $1,800) = $500,000 / $700 = 714.29. Rounding to the nearest whole unit gives 714 pieces.

Warren Soft Makes Period Pieces