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ScanSolve AI Tutor · Accepted Answer

To calculate the break-even point in units, we use the formula:

\text{Break-Even Point (Units)} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}

Identify the given values.
Fixed Costs (FC) = N50,000
Selling Price per Unit (SPU) = N20
Variable Cost per Unit (VCU) = N10
Calculate the contribution margin per unit.
The contribution margin per unit is the difference between the selling price per unit and the variable cost per unit.
$\text{Contribution Margin per Unit} = \text{SPU} - \text{VCU}$ $\text{Contribution Margin per Unit} = \text{N}20 - \text{N}10 = \text{N}10$
Substitute the values into the break-even point formula.
$\text{Break-Even Point (Units)} = \frac{\text{N}50,000}{\text{N}10}$
Calculate the break-even point.
$\text{Break-Even Point (Units)} = 5,000 \text{ units}$
The break-even point in units is $\textbf{5,000 units}$ .

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