BM1911

Date:

Breakeven Computation
Directions: Analyze the given problems and compute for what is being asked. (2 items x 5 points)

1. TechGate makes PS4 games with a selling price of P1,040.00 per CD with a variable cost of P624.00
per unit. The fixed cost for the period is P2,080,000. How many CDs should TechGate sell to
breakeven?

Formula:
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = 𝐹𝐶 (Fixed cost)/ 𝑃 (Price of the product or service) – 𝑉𝐶 (Variable cost)
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = P2,080,000/ (P1,040 – 𝑃624)
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = P2,080,000/ P416
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = 5,000 CDs
TechGate needs to sell 5000 CDs to breakeven. If TechGate sells more than 5000 CDs,
then he will make profit.

2. Adel and Tony run a small online business specializing in delivering organic fruit and vegetables to
the local area. They buy from local farms and package these together in boxes. Each box costs
P208.00 and is being sold at P500.00 per box. Other fixed costs incurred each year are as follows:
Php
Rent of delivery van 4,500
Rent of premises 10,500
Direct wages 10,000
Advertising 2,000

Calculate the break-even point in boxes (unit).

𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = 𝐹𝐶 (Fixed cost)/ 𝑃 (Price of the product or service) – 𝑉𝐶 (Variable cost)

𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = P27,000/ (P500 – 𝑃208)
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = P27,000/ P292
𝐵𝑟𝑒𝑎𝑘𝑒𝑣𝑒𝑛 = 92.47 or 92

Rubric for grading

PERFORMANCE INDICATORS POINTS
Complete solution with correct answer 5
Incomplete solution with correct answer 3
No solution with correct answer 1

11 Seatwork 2 *Property of STI

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