Acompany incurs fixed costs of $35,000 and average variable costs of $7 per item. this company sells 10,000 units and just breaks even. the unit selling price for the product is:

The unit selling price for the product is $10.5

Explanation:

The formula for break-even quantity (BEQ) is as followed

BEQ = FC / (P - VC)

Where FC is fixed cost, P is price and VC is variable cost

Plug in the numbers we got

10,000 = 35,000 / (P - 7)

=> P - 7 = 3.5

=> P = 10.5

Double check: With $10.5 the unit price

The revenue will be 10,000 * 10.5 = $105,000

Total variable costs 10,000 * 7 = $70,000

So the Total costs = total variable costs + fixed cost = $70,000 + $35,000 = $105,000 = Revenue. Really breaks even.

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.

false! basically!

i hope i'm correct.