Labor-Intensive: Unit Sales to Break Even = Fixed Expenses $\div$ Unit CM
= ($1,320,000 + $500,000)

question 135

Essay

Labor-intensive: Unit sales to break even = Fixed expenses $\div$ Unit CM
= ($1,320,000 + $500,000) $\div$ ($30 per unit - $17.60 per unit - $2 per unit)
= $1,820,000 $\div$ $10.40 per unit
= 175,000 units

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Definitions:

Units Of Output

A quantifiable count of the products or goods produced by a company or an industry.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, decreasing as more is produced.

Short Run

A time period in economics where at least one factor of production is fixed, limiting the ability of businesses to adjust to changing market conditions.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market balance.