Mark has a business selling pens. He is trying to calculate his break even point for the current month. His fixed costs are £12,000. It costs him £2.10 to produce these pens and they sell for £2.70. How many pens does he need to sell?
Total Fixed Cost (£12,000) Divided by (Revenue per unit[£2.70] - Variable cost per unit[£2.10] = 60p)Break even point = £12,000 divided by 0.6 = 20,000 pens
AP
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