Questions: Class 1 5 Break Even Analysis Questions 1. Your monthly fixed costs are $100,000. Y our price is $25 and your variable costs are $15 per unit, how many units do you have to sell to break even? 100,000/(25-15 )= 10,000 2. Your monthly fixed costs are $100,000. Your price is $25 and your contribution margin is $10, how many units do yo u have to sell to break even? a. First Get Total Variable Cost: Price per unit (-) VC= Contribution Margin i. 25-VC=10 ii. 25-10=VC iii. VC=15 b. Next, Use previous Formula: 100,000/(25-15)= 10,000 3. Arrow sells for $35.00. Your material cost per unit is $14.00 and labor costs per unit are $10.00. Y our fixed costs are $4,500. How many do you have to sell to break even? 4500/(35-24)= 410 4. Arrow sells for $35.00. Your material cost per unit is $14.00 and labor costs per unit are $10.00. Your fixed costs are $4,500. Assuming everything else remains the same, if you were to decrease your price by $2.00, how many do you have to sell to break even? 4500/(33-24)= 500 5. Arrow sells for $35.00. Your material cost per unit is $14.00 and labor costs per unit are $10.00. Your fixed costs are $4,500 . Assuming everything else remains the same, if you were to increase your automation by 2 levels, how many do you have to sell to break even? 4500/ (35-32) = 1500