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Chapter 2: 2BP_a (page 145)

The Hartnett Corporation manufactures baseball bats with Pudge Rodriguez’s autograph stamped on them. Each bat sells for \(35 and has a variable cost of \)22. There are $97,500 in fixed costs involved in the production process.

a. Compute the break-even point in units.

Short Answer

Expert verified

Break-even point of the company is 7,500 units.

Step by step solution

01

Variable cost

Variable cost means the cost which fluctuates with the changes in the sales or production volume of the company. Production cost, delivery cost, packaging supplies, etc., are examples of the variable cost.

02

Break even point (in units)

Breakevenpoint=FixedcostRevenueperunit-Variablecostperunit=$97,500$35-$22=7,500units

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