Greenfield Manufacturing estimates the variable cost of producing one unit of their product to be $8.75. They plan to produce 15,000 units. The company expects to incur fixed costs of $50,250. What is Greenfield’s break-even selling price?

To find Greenfield Manufacturing's break-even selling price, we need to determine the price per unit that covers both fixed and variable costs when producing and selling 15,000 units.

### Step-by-Step Solution:

1. **Identify Variable and Fixed Costs**:
   - Variable cost per unit, $ V = 8.75 $
   - Total fixed costs, $ F = 50,250 $

2. **Set Up the Break-Even Equation**:
   The total revenue at the break-even point must equal the total costs (fixed + variable costs). So, if $ P $ is the break-even selling price per unit:
   \[
   \text{Total Revenue} = \text{Total Cost}
   \]
   \[
   P \times 15,000 = 50,250 + (8.75 \times 15,000)
   \]

3. **Calculate Total Variable Costs**:
   \[
   \text{Total Variable Cost} = 8.75 \times 15,000 = 131,250
   \]

4. **Calculate Total Cost**:
   \[
   \text{Total Cost} = 50,250 + 131,250 = 181,500
   \]

5. **Set Total Revenue Equal to Total Cost and Solve for $ P $**:
   \[
   P \times 15,000 = 181,500
   \]
   \[
   P = \frac{181,500}{15,000} = 12.10
   \]

### Answer:
Greenfield Manufacturing’s break-even selling price is **$12.10** per unit.

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**Further Practice Questions:**

1. What would the break-even price be if fixed costs increased to $60,000?
2. How does an increase in variable costs to $10 per unit affect the break-even price?
3. What is the total revenue needed to break even if they sell 15,000 units at the calculated break-even price?
4. How many units would need to be sold if the selling price per unit was set at $13?
5. What is the margin per unit at the break-even price?

**Tip**: Break-even analysis is crucial in determining how pricing, costs, and volume interact to affect profitability.

Calculate the break-even selling price for Greenfield Manufacturing given a variable cost per unit of $8.75, fixed costs of $50,250, and a planned production of 15,000 units. This solution uses break-even analysis, essential for understanding how pricing, costs, and volume affect profitability, ideal for Grades 10-12.

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