Neverlate is world famous for its precision pocket watches. The company has esti
ID: 2344623 • Letter: N
Question
Neverlate is world famous for its precision pocket watches. The company has estimated that variable manufacturing costs and variable selling costs per watch will be $72 and $43, respectively, for 20xx. Also during 20xx, the company is expecting fixed manufacturing costs to total $291,600 and fixed general and administrative expenses to amount to $253,175. The anticipated selling price of each watch is $500.
a. Compute the breakeven point in sales units.
units
b. Compute the breakeven point in sales dollars.
$
Explanation / Answer
a. breakeven point in sales units = ($291,600+$253,175)/(500-72-43) =1415 units b. breakeven point in sales dollars =1415*500 = $707,500.00