Breakeven Analysis in Business: How to Calculate Breakeven Sales

How can we calculate the breakeven sales for a business option?

Provided data: Fixed Costs = $26,000, Selling Price per Unit = $50, Variable Costs per Unit = $20.

Answer:

The breakeven sales for a business option can be calculated by dividing the Fixed Costs by the difference between the Selling Price per Unit and Variable Costs per Unit.

In order to determine the breakeven sales for a business option, you can follow this formula:

Breakeven Sales = Fixed Costs / (Selling Price per Unit - Variable Costs per Unit)

Using the provided data:

Fixed Costs = $26,000

Selling Price per Unit = $50

Variable Costs per Unit = $20

Plug in the values into the formula:

Breakeven Sales = $26,000 / ($50 - $20) = $26,000 / $30 = 866.67 units

Therefore, the breakeven sales for this business option would be 866.67 units.