Mariposa Corporation sells \"Bigger\", its only product. The following informati

Question

Mariposa Corporation sells "Bigger", its only product. The following information is available for the current month:

                Selling price per unit       $109

                Standard fixed manufacturing costs per unit         $50

                Variable selling and administrative costs per unit               $8

                Standard variable manufacturing costs per unit   $3

                Fixed selling and administrative costs      $42,000

                Units produced 12,000 units

                Units sold           10,000 units

What is the variable costing breakeven point in units?

Explanation / Answer

Total fixed costs = 12000 * 50 + 42000 = 642000

Contribution per unit = 109 - 3 - 8 = 98

Break even point in units = Fixed costs / Contribution per unit

642000 / 98 = 6551 units

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