Answer:
Break-even point= 2600 units
Explanation:
The break-even point refers to the units necessary to cover a company's total amount of fixed and variable expenses during a specified period of time.
The formula to calculate the break-even point is the following:
break-even point= fixed costs/contribution margin
Contribution Margin: The contribution margin is a product's price minus all associated variable costs (sales- variable costs), resulting in the incremental profit earned for each unit sold.
Fixed costs: A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.
In this case:
Contribution margin= $100 - (45+20+10)= $25
Fixed Costs= 25000+15000+25000= $65000
Break-even point= 65000/25= 2600 units
