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question mode multiple choice question jvl enterprises has set a target profit of $126,000. the company sells a single product for $50 per unit. variable costs are $15 per unit and fixed costs total $98,000. how many units does jvl have to sell to break-even?

Respuesta :

There are 2800 units that JVL has to sell to Break-even.

Target profit of JVL Enterprises = $126000

Variable cost (VC) = $15

Selling price of a single unit (SP) = $50 per unit.

Fixed cost related to production (FC) = $98000

For finding the break-even unit we can divide the fixed cost with the difference of selling price and variable cost.

Break even unit = FC / (SP-VC)

= 98000 / (50 – 15)

= 2800 units

In economics, business, and specifically cost accounting, the break-even point (BEP) is the moment at which total revenue and total costs are equivalent. Even if opportunity costs were paid and capital obtained the projected return after adjusting for risk, there is no net gain or loss and one has achieved break-even. The break-even point (BEP) or break-even level denotes the sales amount necessary to cover all costs, including both fixed and variable costs to the business, in either unit or revenue terms.

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