question archive Southwest Industries produces sports gloves that sell for £15 per pair
Southwest Industries produces sports gloves that sell for £15 per pair
Subject:AccountingPrice:2.86 Bought3
Southwest Industries produces sports gloves that sell for £15 per pair. Variable expenses are £8 per pair and fixed expenses are £35,000 annually.
The break-even point in units for Southwest industries is:
Multiple Choice
- 8,000 pairs.
- 5,000 pairs.
- 4,375 pairs.
- 2.333 pairs.
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The correct answer is option 2
Step-by-step explanation
STEP 1
Break even point in units=fixed cost/selling price-variable cost
Where;
fixed cost=35,000
selling price per unit=15
variable cost=8
STEP 2
Break even point in units=35,000 /15-8
=35,000/7
Break-even point in units=5,000 Pairs
