Im trying to get the selling price the question is marina has estimated the fixed cost per month are 240,000 and variable cosdt per dollar of sales is $0.60.
what is the break even point per month use
To calculate the break-even point, we need to determine the sales volume at which the total revenue equals the total costs, resulting in zero profit or loss. The formula for break-even point is as follows:
Break-even point (in units) = Fixed costs / (Selling price per unit - Variable cost per unit)
In this case, we are given the following information:
Fixed costs per month = $240,000
Variable cost per dollar of sales = $0.60
To find the break-even point, we need to convert the variable cost per dollar of sales to per unit. Assuming the selling price per unit is $1, the variable cost per unit can be calculated as follows:
Variable cost per unit = Variable cost per dollar of sales / Selling price per unit
Variable cost per unit = $0.60 / $1 = $0.60
Now we can substitute the values into the break-even point formula:
Break-even point (in units) = $240,000 / ($1 - $0.60)
Calculating the denominator first:
$1 - $0.60 = $0.40
Substituting the denominator back into the formula:
Break-even point (in units) = $240,000 / $0.40
Finally, we can calculate the break-even point:
Break-even point (in units) = $600,000
Therefore, the break-even point per month, using the given information, is $600,000 in sales volume.