2. In its first year, “ABOL BUNA” Company had the following experience.

Question

Sales = 25,000 units Selling price = Birr 100
Total variable cost = Birr 1,500,000 TFC = Birr 350,000
Required
b) Find the break-even point in terms of quantity

Answer 1

.

Break-even point in terms of quantity = Total Fixed Cost / (Selling Price - Total Variable Cost)

Break-even point in terms of quantity = 350,000 / (100 - 1,500,000)

Break-even point in terms of quantity = 5,000 units