Jane Corporation produces model toy cars. Each sells for $23.79. Its variable cost per unit is $17.50. Assuming it has a fixed cost of $137,122. What is the breakeven point for Jane Corporation?



To find the breakeven point, we use the breakeven formula:

\[
\text{Breakeven Point (units)} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}
\]

Given:
- Selling Price per Unit = $23.79
- Variable Cost per Unit = $17.50
- Fixed Costs = $137,122

Substituting into the formula:

\[
\text{Breakeven Point} = \frac{137,122}{23.79 - 17.50}
\]

\[
\text{Breakeven Point} = \frac{137,122}{6.29} \approx 21,799.37
\]

Since the breakeven point must be a whole number, we round up to the next unit:

\[
\text{Breakeven Point} = 21,800 \text{ units}
\]

Thus, Jane Corporation must sell **21,800 toy cars** to break even.

Would you like any further details or have any questions?

Here are 5 related questions:
1. How does an increase in variable costs affect the breakeven point?
2. What would happen to the breakeven point if fixed costs were reduced by 10%?
3. How would Jane Corporation calculate the profit after selling 30,000 units?
4. How does a change in selling price influence the breakeven point?
5. What is the contribution margin, and how is it useful in this scenario?

**Tip:** The contribution margin (selling price - variable cost) plays a key role in understanding profitability per unit.

Jane Corporation produces model toy cars. Each sells for $23.79. Its variable cost per unit is $17.50. Assuming it has a fixed cost of $137,122. What is the breakeven point for Jane Corporation?

Calculate the breakeven point for Jane Corporation's toy car business with fixed costs of $137,122, a selling price per unit of $23.79, and variable costs per unit of $17.50. Learn how to use the breakeven formula to determine how many units need to be sold to cover costs. Suitable for Grades 10-12.

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