Keller Company estimates that variable costs will be 60% of sales and fixed costs will total $1,920,000. The selling price of the product is $10, and 600,000 units will be sold.
(a) Compute the break-even point in units and dollars
(b) Compute the margin of safety in dollars and as a ratio
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I really don' t know how to do this but Sarkar is really good at this type of stuff and if you msg him I know he'll be able to help :) I'm really sorry
Thats ok becca..at least u give it a shot..where do i find Sarkar?
Umm well If you just go to your create a message thing and type his name in the box it'll send him the msg and he'll probably be on in the morning :)
oh ok. ill do that..but I am actualy taking the mid-term right now LOL
oh nooo I'm sorry hold on and let me see if I can find someone to help you!
o thats would be awesome
okay I just asked DumbCow and he said he'll take a look!
anyway to break even you need--> total revenue = total costs
revenue = price*quantity
costs = fixed cost + variable costs(based on units sold)
Let x be units sold
revenue = 10x
costs = $1.92 million + 60% revenue = 1.92 million + 6x
10x = 1.92 million +6x
x = 480,000
not sure about margin of safety, i would have to look that up