Concord Corporation sells a product with a contribution marg

Concord Corporation sells a product with a contribution margin of $16 per unit, fixed costs of $223200, and sales for the current year of $300000. How much is Concord’s break-even point?

Solution

contribution margin=Sales-Variable cost

Breakeven point is the level of sales where contribution margin=Total fixed costs ie the point where total revenues is equal to the total costs.

Breakeven point=Fixed cost/contribution margin

=(223200/16)

=13950 units.