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# (Solved): Break-Even Point in UnitsChillmax Company plans to sell 3,500 pairs of shoes at \$60 each in the comi ...

Break-Even Point in Units

Chillmax Company plans to sell 3,500 pairs of shoes at \$60 each in the coming year. Unit variable cost is \$21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals \$78,000 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

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1. Calculate the break-even pairs of shoes.

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At the break-even point, operating income equals \$0. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units.

 Break-Even Units = Total Fixed Cost (Price ? Variable cost per unit)

Review the "How to Calculate the Break-Even Point in Units" example in your text.

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2. Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number.

 blank Total blank blank Sales \$fill in the blank 28df3df7602bfe9_1 blank blank Total variable cost fill in the blank 28df3df7602bfe9_2 blank blank Total contribution margin \$fill in the blank 28df3df7602bfe9_3 blank blank Total fixed cost fill in the blank 28df3df7602bfe9_4 Operating income \$fill in the blank 28df3df7602bfe9_5 blank blank

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