Karlik Enterprises distributes a single product whose selling price is $27 per unit and whose variable expense is $19 per unit. The company’s monthly fixed expense is $24,000.

Karlik Enterprises distributes a single product whose selling price is $27 per unit and whose variable expense is $19 per unit. The company’s monthly fixed expense is $24,000.

2. Calculate the company’s break-even point in unit sales.

2.

The break-even point is the point where the total sales revenue and the total expense lines intersect. This occurs at sales of 3,000 units. This can be verified as follows:

Profit	=	Unit CM × Q − Fixed expenses
	=	($27 − $19) × 3,000 − $24,000
	=	$8 × 3,000 − $24,000
	=	$24,000 − $24,000
	=	$0

Thanks