Canine Company produces and sells dog treats for discriminating pet owners. The unit selling price is $10, unit variable costs are $7, and total fixed costs are $3,300. What are breakeven sales?
10x=3300+7x,3x=3300,x=1100 answer =1100
11000
To find the breakeven sales, we need to determine the number of units that need to be sold in order to cover the fixed costs. We can use the following breakeven formula:
Breakeven Sales = Fixed Costs / Contribution Margin
The contribution margin is the difference between the unit selling price and the unit variable costs. In this case, the unit selling price is $10 and the unit variable costs are $7, so the contribution margin would be $10 - $7 = $3.
Substituting the values into the breakeven formula:
Breakeven Sales = $3,300 / $3
Dividing the fixed costs by the contribution margin:
Breakeven Sales = 1,100 units
Therefore, the breakeven sales for Canine Company's dog treats are 1,100 units. To cover the fixed costs of $3,300, they would need to sell 1,100 units of dog treats.