# Owen Conner works part-time packaging software for a local distribution company in IndianaExample of the break-even point

### Problem Data

It is required to calculate the **break-even point** with the following data:

- Total Fixed Costs (F)
- 15000
- Variable Cost per Unit (V)
- 8
- Selling Price per Unit (P)
- 12.5
- Description
**Owen Conner works part-time packaging software for a local distribution company in Indiana**Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $15,000 for this process, direct labor is $3.50 per package, and material is $4.50 per package. The selling price will be $12.50 per package. a) What is the break-even point in units? b) How much revenue do we need to take in before breaking even?

## Solution

The following are the detailed calculations and graphs to obtain the **break-even point**:

### Step 1:

**a) Break-even point in units:**

To calculate the break-even point in units (BEP_{U}) we will use the following formula:

According to the results, the company must sell **3333.333 units** to break even (no profit or loss).

**b) Break-even point in dollars:**

To calculate the break-even point in dollars (BEP_{$}) we will use the following formula:

The company must sell to obtain revenues of **$41666.663** to break even (No profit or loss).

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