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A technology company manufactures a smartphone for $350. The company sells each device for $850. It has weekly production costs of $25,000. How many smartphones does the company have to sell each week to break even?

Sagot :

Parrain

The company needs to sell 50 phones a week to break even.

The formula for finding the breakeven point is:

= Fixed costs / Contribution margin

The Contribution margin is found by deducting the variable costs from the selling price.

Variable cost = $350 per phone

Fixed cost = $25,000 incurred per week

Contribution margin :

= Selling price - variable cost

= 850 - 350

= $500

Breakeven point:

= 25,000 / 500

= 50 phones

50 phones need to be sold weekly for the company to break even.

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