Reference no: EM132800410
Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $10,000 for this process, direct labor is $3.50 per package, and material is $4.50 per package. The selling price will be $12.50 per package. How much revenue do we need to take in before breaking even? What is the break-even point in units?
1. What is the Break-even point in units?
2. How much revenue at break-even point?
3. If they sold 2000 units, would they gain or lose profit?
4. If they sold 3000 units, would they gain or lose profit?
5. If the fixed cost decreased by $1,000, would the break-even point be higher or lower?
6. If the direct labor cost increased by $1, would the break-even point be higher or lower?
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