https://file.aiquickdraw.com/mathbot/file/17259076304969owc0l8v.jpg

To find the number of units the company needs to sell to break even, we'll use the break-even formula:

\[
\text{Break-even point in units} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}
\]

From the problem:

- Selling price per unit = $5
- Variable costs are 50% of total revenue, which means the variable cost per unit is $ 50\% \times 5 = 2.5 $ dollars per unit.
- Fixed costs = $6,300

Plugging these values into the formula:

\[
\text{Break-even point} = \frac{6300}{5 - 2.5} = \frac{6300}{2.5}
\]

Now, let's calculate:

\[
\text{Break-even point} = 2520 \text{ units}
\]

The company needs to sell **2,520 units** to break even.

Would you like more details or have any questions?

Here are some related questions you might consider:
1. What would be the break-even point if the variable costs were 40% of total revenue?
2. How would the break-even point change if the fixed costs increased to $7,000?
3. What is the total revenue at the break-even point?
4. How much profit will the company make if it sells 3,000 units?
5. How does changing the selling price to $6 per unit affect the break-even point?

**Tip:** Break-even analysis helps in understanding the relationship between costs, volume, and profits, enabling businesses to make informed decisions about pricing and production levels.

The Oliver Company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,500 units in 2005. The selling price will be $5 per unit. Variable costs are estimated to be 50% of total revenue. Fixed costs are estimated to be $6,300 for 2005. How many units should the company sell to break even?

Learn how to calculate the break-even point for Oliver Company based on fixed costs of $6,300, a selling price of $5 per unit, and variable costs at 50% of revenue. This analysis is crucial for understanding the number of units the company must sell to break even in 2005.

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