Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 18,000 DVDs and 4,500 equipment sets. Information on the two products is as follows:
DVDs Equipment
Sets
Price $11 $15
Variable cost per unit 4 7
Total fixed cost is $84,000.
What is the equation to compute the break-even quantity of each product? The break-even on DVDs and the break-even on equipment sets?
I know the equation for break eve would be:
Fixed Costs/price - variable unit cost
Answers: 3
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