A company makes travel umbrellas. Its fixed costs are $1000 a week and its variable costs for one batch of umbrellas per week is $500 for 2000 units. After doing market research, the company sets the price per umbrella at $11. What is the break-even quantity for a week’s worth of umbrellas?

Break-even point in units= 93 units

Explanation:

Giving the following information:

Its fixed costs are $1000 a week and its variable costs for one batch of umbrellas per week are $500 for 2000 units.

After doing market research, the company sets the price per umbrella at $11.

Unitary variable cost= 500/2,000= $0.25

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

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 1,000/ (11 - 0.25)

Break-even point in units= 93 units

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

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