allen company sells flags with team logos. Allen has fixed costs of $588,000 per year plus variable costs of $ 5.50 per flag. Each flag sells for $ 12.50.
Then, what IS your question?
Sra
To calculate the break-even point for Allen Company, we need to determine the number of flags they need to sell in order to cover their costs.
The total cost for Allen Company can be calculated as follows:
Fixed costs: $588,000 per year
Variable costs: $5.50 per flag
Total costs = Fixed costs + (Variable costs per flag * Number of flags sold)
Using the given information, we can calculate the total cost per flag:
Total cost per flag = $5.50 + $12.50 (selling price per flag)
To find the breakeven point, we need to set the total cost equal to the total revenue:
Total cost = Total revenue
Let's denote the number of flags sold as "x".
Equating the total cost and total revenue:
Fixed costs + (Variable costs per flag * x) = selling price per flag * x
Simplifying the equation:
$588,000 + ($5.50 * x) = $12.50 * x
Now, we can solve this equation to find the value of x, which represents the breakeven point.