Find the break- even point if the selling price is $8 per unit, variable cost $3 per unit and fixed cost $3000.
To find the break-even point, we need to determine the number of units that need to be sold in order to cover both the fixed and variable costs.
The formula to calculate the break-even point is:
Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)
Given the selling price per unit is $8, the variable cost per unit is $3, and the fixed cost is $3000, we can substitute these values into the formula:
Break-even point = $3000 / ($8 - $3)
Calculating the difference between the selling price per unit and the variable cost per unit:
$8 - $3 = $5
Now, we can substitute this value into the formula:
Break-even point = $3000 / $5
Dividing $3000 by $5:
Break-even point = 600 units
Therefore, the break-even point is 600 units.