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dxpayne dxpayne
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7 years ago
Ben's Custom Golf sells special clubs. Ben is able to purchase equipment from a manufacturing company for $100 each. The equipment is sold for $150 each.

Required:
a.   What is the break-even in units assuming Ben incurred $2,500 in selling expenses, and there were no other expenses?
b.   What would be the break-even in units assuming Ben incurred $2,500 in selling expenses and had $10,000 in other fixed expenses?
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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wrote...
#1
7 years ago
a.   N = Break-even units
   $150N - $100N - $2,500 = 0
   $50N - $2,500 = 0
   N = $2,500/$50
   N = 50 units

b.   N = Break-even units
   $150N - $100N - $2,500 - $10,000 = 0
   $50N - $12,500 = 0
   N = $12,500/50
   N = 250 units
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