Tee Times, Inc. produces and sells the finest quality golf clubs in all of Clay County. The...
Question:
Tee Times, Inc. produces and sells the finest quality golf clubs in all of Clay County. The company expects the following revenues and costs in 2009 for its Elite Quality golf club sets:
Revenues (400 sets sold @ $600 per set) $240,000
Variable costs $160,000
Fixed costs $50,000
How many sets of clubs must be sold for Tee Times, Inc. to reach their breakeven point?
Break-Even Point:
The Break-Even Point refers to the sales volume (expressed in the number of units or sales revenue) where the revenue earned is equal to the expenses incurred during the operating period. Thus at the break-even point, there is no profit or loss for the company. The break-even point is used by the company in setting target unit sales or target sales as the company knows it must exceed the break-even point in order to be profitable.
Answer and Explanation: 1
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View this answerNote the calculations below to determine the number of clubs that must be sold to reach the break-even point.
In the first table, note the formula...
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How to Calculate the Break-Even Point - Definition & Formula
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