Break-even analysis: Trident, Inc., makes designer gold bracelets. Their annual costs include shop rent of $12,500, salaries for two jewelers 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 labor, 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 fixed costs are $12,500 + $118,000 + $10,000 + $13,000 = $153,500. The contribution margin per bracelet is $5,500 - $2,000 - $1,250 - $250 = $2,000. Therefore, the minimum number of bracelets that need to be sold to earn a profit is $153,500 / $2,000 = 77.

Break-Even Analysis: Trident, Inc