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Gourmet Pets is interested in computing the breakeven quantity for its new product, Prime Cuts. The annual fixed costs that must be covered by this product amounts to $750,000. Variable costs to produce one package of Prime Cuts are $2. Prime Cuts will sell for $6 per can. The breakeven quantity is _____ .

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jayilych4real

Answer:

187,500 units.

Explanation:

Fixed cost= $750,000

Variable cost= $2

Price= $6

To calculate the break-even quantity, we use the formula

Break even= Fixed cost ÷ (Price - Variable cost)

Let's input the values of each

$750,000/($6 - $2)

= $750, 000/ $4

= 187,500 units.

Therefore the break even is 187,500 units.

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