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14. A small company manufactures portable home computers. The plant has fixed costs (leases, insurance, and so on) of $48,000 per month and variable costs (labor, materials, and so on) of $1,400 per unit produced. The computers are sold for $1800 each. How many units must be manufactured and sold each month for the company to break even?

Respuesta :

The break even point is given by:

[tex]bp=\frac{\text{ fixed cost}}{\text{ selling price per unit-variable cost per unit}}[/tex]

Plugging the values given in the problem we have:

[tex]bp=\frac{48000}{1800-1400}=120[/tex]

Therefore the need to produce and sell 120 units to break even

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