Break-Even Analysis

The Hartnett Corporation manufactures baseball bats with Sammy Sosa’s autograph
stamped on them. Each bat sells for $13 and has a variable cost of $8.
There is $20,000 in fixed costs involved in the production process.

a. Compute the break-even point in units.

Selling price per item= $ 13
Variable cost per bat= $ 8
Contribution margin= 5
Fixed cost…………= 20,000
Breakeven Units=20,000/5= 4,000

b. Find the sales (in units) needed to earn a profit of $15,000

(how do you find the sales in units to earn profits of 15,000?)
Do you increase the selling price or decrease the VC?


Expert Solution
No answers

Submit Your Answer